My #1 Hack for “Baked-In” Gains (and 9% Dividends) in CEFs

If there’s one thing we need to remember when we buy high-yield closed-end funds ( CEFs ), it’s this: always demand a discount. Well, make that two: always demand a high dividend! Because CEFs are renowned for their high—and often monthly—payouts, with the average CEF yielding around 8% today. But back to discounts. Luckily for us, they’re common in the CEF world: of the 433 CEFs tracked by the CEF Connect screener, some 390 trade at discounts to net asset value (NAV). These discounts are basically free money because they let us pick up, say, Mastercard (MA) for 83 cents on the dollar through a CEF like the Gabelli Dividend & Income Trust (GDV). … Read more