CLM: 5 Key Factors you MUST KNOW Before Investing + WHY I SOLD ALL MY SHARES! CLM Alternatives

[@FloridaBoyBushcraftSurvival]

So the trick is to 1) DRIP at the NAV. Then 2)sell 99.9% of your shares just before the rights offering, wait a month for the RO to expire and the price to fall. Then 3) pile back in at a lower price and 4)DRIP at the NAV until the next RO. You can accumulate a lot of shares this way and grow your investment significantly. Make sure your broker does the DRIP at NAV though, Vanguard does NOT but ETrade DOES...

[@PassiveIncomeInvesting]

yup this can work great. seems like you mastered CLM!

[@SUP1111BrooOO1]

How do we do this??

[@debbieparisian4792]

you first have set up your investment to reinvest the dividends at back into the fund and then you have to call your broker and ask that they reinvest the dividend at the NAV . Not all brokers offer this though. I have Fidelity, they automatically reinvest at the NAV @@SUP1111BrooOO1

[@anthonykathleenkennard3933]

Do you hold CLM as a core position? With Adrian's clarification that the return of capital eliminates the taxes, I am thinking this is a good core position d/t Fidelity has the NAV DRIP. With the positive tax feature, it would be ok in a non retirement acct too, am I tracking this right?

[@Talon.77]

I thought you could only purchase new shares at the NAV base on how many share you own. Ex: you own 100 shares. CLM announces rights offering for current share owners to purchase but only 60% number of shares you currently own. You may choose to purchase 1-60 shares at NAV or “Discount”. Thoughts on that???

[@Robert-uo5cq]

Thanks for the video and explanation but I did have a question. Why would somebody sells most of their shares before the rights offering. Wouldn't it be better to hold some to purchase more shares at NAV price? I saw this online: For example, CLM allows shareholders to buy one share for every three shares they own, with the subscription price equal to the greater of 122% of the net asset value or 65% of the market price. Thanks

[@garythomas3150]

Great video. You’ve described this fund better and more clearly than anyone else I’ve seen. I’m confused though. Why is this a five star fund that so many people like so much if it slightly underperforms SPY (counting the great deal of dripping at NAV), yet has a monster management fee and horrendous tax consequences (all your growth comes in the form of fully taxable income) compared to the great tax treatment of capital appreciation you get from SPY? It seems like, with CLM, you make a little less, and pay out a ton more in taxes. What am I missing here? Thanks for your help!

[@PassiveIncomeInvesting]

everything under-performs SPY lol . its simple: its an Income Vehicle and gives out mostly ROC, so its not taxable anyways. its not for everyone...

[@garythomas3150]

@@PassiveIncomeInvesting Thanks for your answer 👍

[@keithcooke5066]

I think I just learned more about closed end funds in this one video than all the rest combined. I love CLM but hate that it doesn't buy at NAV , at least I'm saving the 9.99 that TD charges as I am dripping. Still gonna hold

[@PassiveIncomeInvesting]

glad you learned!

[@joannapatterson4625]

I’ve sold a small portion of CLM. CLM is still a core position. I got in at a good price in 2022 when the dividend was 20 percent. I don’t care what the next dividend is as I’ll continue to collect the income. CLM is a buy and hold for me. SVOL and YieldMax balance out my cash flow which I’m using to buy core ETFs. Thanks for another video 🎉

[@PassiveIncomeInvesting]

thanks for another great (constructive) comment J

[@joannapatterson4625]

@@PassiveIncomeInvestingyou’re welcome.

[@stevesolo-f7h]

你好博主，我想请问一个问题，既然clm这只基金是跟踪纳斯达克综合指数的，截止2024年1月，纳斯达克指数已经上涨了非常多，那为什么clm这只基金并没有上涨，这是什么原因呢？很期待您的解答，谢谢

[@saustinredsox]

Great minds think alike Adrian!!! As long as there is a SVOL why take the risks with CLM (even with drip)? Best regards, Steve.

[@25Soupy]

Getting the stock on DRIP at NAV price would be better than retail price for sure. Even so I'm still getting a 17.53% yield which is better than SPYI 12.10% & JEPI/JEPQ 10% yields. Plus, the latter 2 are in HYLD, which I own a lot of. Plus, I'm not dripping the stock anyway. Those are my 3 reasons for staying with CLM until something else I see I can buy at a discount and yields me the same monthly income.

[@f.w.1318]

Agree, my brokerage drops at NAV, you can’t the Div.

[@DerivCapital]

spyI is at 17% buddy not 12%

[@efullname]

I like this kind of review, concise clear direct to the point, and you repeat important points. Bought CLM after last RO so my yield is 16%, but the 15% tax deduction every month is a bummer holding in TFSA. Just waiting for price increase then i'll swap with Canadian listed stock.

[@dantbow]

Thanks for the Information. I didn't know that about the DRIP option at buying at NAV. This makes a huge difference in my future purchases of clm.

[@PassiveIncomeInvesting]

Glad it was helpful!

[@jasoncowan4357]

does anybody know what they do with the money CLM gets when shares are bought at the rights offering....dont they use it to reinvest or grow assets.?

[@timtellers4584]

CLM is my favorite fund to invest in, I have 1062.3 shares now. I first invested in it in Feb of 2021. I rode it down in the red pretty bad just recently got back to the green but I love the dividend so can’t complain!

[@timtellers4584]

Also I’m with Fidelity and get the dividend at the discount price!!

[@mrprfct7069]

@@timtellers4584 how long did it take for fidelity to show the actual drip? mine has not updated in 2 days since friday

[@Seoulsearch616]

This is the most thorough video I have ever seen on this fund I've ever seen. Thank you so much! 👍🏼

[@dwights1024]

What did he buy y’all?

[@daveomin4373]

I got mixed info from TD Ameritrade, but it seems they/Schwab do not drip CLM at the NAV. Can anyone confirm this?

[@Talon.77]

I can confirm that Fidelity DOES DRIP at the NAV and it’s in writing on the CLM page in Fidelity. Website not app.

[@johnjones761]

Confirmed Schwab does not DRIP at NAV unless you call them and set it up custom

[@pedro-mw5tp]

Great video! Do you jnow how can I check if IBKR drips at NAV? Also there is DRIP in IbKR, but how do I know it is at NAV?

[@PassiveIncomeInvesting]

Call them to confirm is the best solution

[@martinmalo1690]

How many times have I heard "My strategy is for the LONG TERM" or "I don't care where the markets are going..." or "My strategy is to buy and HOLD FOREVER"? What's with all this recent portfolio turnover?

[@berninme]

Lol. Very good question. He changed his tune quite a bit from a year ago. And he was quite mad at me for calling him out on CLM at the time.

[@PassiveIncomeInvesting]

not that I owe you any explanation but if you watched the entire video i clearly explain why. my strategy is still a long term buy and hold strategy but it doesn't mean i cant make my portfolio more efficient if i see an opportunity to do so. i also provide reasons and justifications for all the moves i do.

[@PassiveIncomeInvesting]

YES , still really mad at you! i think about you every day! lol

[@Dr_DavidDiv]

Surely there must be an international broker (for non US citizens) that offers the Special DRIP at the NAV for Cornerstone. SCHWAB and IBKR will not come to the party and etrade and Fidelity are not available to Australians (ie non US citizens.) Can anyone offer a suggestion for a suitable broker for non US citizens who wish to avail themselves of the Special DRIP at the NAV for Cornerstone???

[@johnfausz4444]

I heard that Clm has had a reverse stock split in the past on another msg board. Do you think this could happen again? Thanks for any advise!

[@PassiveIncomeInvesting]

sure its possible, but you can never predict such things

[@anthonykathleenkennard3933]

Adrian, did you have CLM previously in your RRSP, Main or other? I am debating between Main and trad IRA because I have no Roth space. D/t the Right offerings, frequent sales=tax event. TY Adrian

[@notcodyv2-773]

I’m confused on this strategy. The dividends won’t cover the losses as it goes down overtime? or am i missing something.

[@PassiveIncomeInvesting]

yes they do and have been. if not the total returns would be negative

[@jiti5034]

@@PassiveIncomeInvesting so what is the point? I am confused

[@nursejoshua]

Hi Adrian! Can i buy clm at nav price in Etrade or other brokers? Or i can only buy it during DRIP?

[@PassiveIncomeInvesting]

you can only BUY something at the market price. its only DRIPS at NAV if your broker is registered with the plan

[@Ultrapassive]

@nursejoshua hello. You can drip at nav with etrade

[@chuckschneider5625]

Is it just closed end funds that DRIP at Nav or most dividend funds?

[@PassiveIncomeInvesting]

only select closed end funds (not many)

[@thepixalking6589]

Wow... this is a great video for people new to this concept. Very thorough!

[@bentobox7788]

You didn't even know about CLM's drip at NAV in your old video, so why would this be the reason to sell now?

[@acirka]

Good point, there might be some others reasons...

[@ksteam5095]

WHAT???? Of course he did. I saw a video he did on CLM almost 2 yrs ago and that was why I got into it.

[@bentobox7788]

@@ksteam5095 That's the video I was referring to. He didn't know about dripping at NAV back then.

[@bentobox7788]

@@acirka My guess is he realizes that CLM is a mistake, and he's using the lack of NAV dripping in Canada as an excuse to exit the position.

[@PassiveIncomeInvesting]

i knew about it, but not FULLY. Now i know its really the broker that needs to be registered in the plan. I found out when i dripped CLM and saw it drip at market price for me. Inquired further and figured out the deal

[@Gandalf17]

sounds like an infinite monthly money glitch. does m1 finance allows drip at nav?

[@substanceo9335]

Can I get the drip at NAV with TD bank? Seems to me like only a few institutions offer it at NAV.

[@PassiveIncomeInvesting]

do not think so. call them?

[@Ultrapassive]

Go to etrade or fidelity

[@rogerbudgell4226]

Very good video Adrian, I will hold until the end of oct , and then decide, I don’t drip and I am pleased with CLM YIELD .

[@PassiveIncomeInvesting]

thanks, do whats best for you, because that's always best!

[@seanacus8476]

Schwab doesn’t do the nav drip. I tried

[@PassiveIncomeInvesting]

:( sorry about that, CALL THEM lol

[@donaldevans2064]

What if you sold CLM before rights offer, and bought after?😊

[@PassiveIncomeInvesting]

i heard of people doing that but look at 2023, no offering was done.

[@donaldevans2064]

I saw no rights offer in 2023. I believe you can sell all but 3 shares, then rebuy at nav

[@donaldevans2064]

Or lower cost

[@Perillo99]

Switch to Fidelity they drip at the NAV

[@6laka.]

idk if anyone mentioned this already but i believe CLM is based on the S&P and CRF is the S&P total return

[@PassiveIncomeInvesting]

ok cool. super similar either way

[@finiteloops8610]

Superb video! And, as mentioned by others, the best explanation of what this fund is all about. Thank you!

[@PassiveIncomeInvesting]

Glad you enjoyed it! -thanks

[@maureenmurphy]

Learned a lot from this video. Still plan to hold for long run and watch of offerings.

[@Rentcollector]

I sold my clm last week made 5% of the principal investment plus my dividends for 15 months!

[@PassiveIncomeInvesting]

wow , good for you. tell that to all the hamburgers who poop on CLM!

[@tonyc2227]

If you keep the CLM share for the rights offering, don't you also suffer from the drop of the stock price?

[@disco4535]

Yes, but you dont lock in that loss if you dont sell. And you will still DRIP at NAV. Selling before and buying back in at the RO is icing on the cake.

[@jiti5034]

This stock has gone from 150+ to 8 ish so does Div income makes it worth it? also if one would have invested at 150 with Margin would there be a margin call

[@anthonykathleenkennard3933]

Thank you Adrian, excellent video.

[@JohnBadagliacco]

does Schwab drip clm at nav

[@Ultrapassive]

No

[@just.bob.j]

You left out something very important. Where does the fund get the millions of dollars per month to pay the dividend?

[@PassiveIncomeInvesting]

the NAV?

[@just.bob.j]

@@PassiveIncomeInvesting NAV or dividend, whatever it's called? But I mean the money they give to owners every month...where does it come from? For example, QYLD sells options and provides a monthly premium to owners. Does CLM sell anything to give money to owners each month?

[@andrewwalker9216]

Doesn’t make sense to me to sell right now-making 18% yield on it

[@PassiveIncomeInvesting]

making much more yield now.... as you already know

[@valveman12]

Thank you Adrian for explaining why you sold CLM. I was dripping at the stock price and not the NAV. I am still undecided if I will sell CLM. If I do, I'll probably buy more SVOL.

[@martinhebert1774]

Does anyone knowof any Canadian brokers that offer the special Drip as I have inquired with several wealth simple ,cibc ,interactive,national bank ,td and they do not

[@PassiveIncomeInvesting]

Nope , none of the Canadian ones do

[@ianwilliams3254]

Great overview. Very useful.

[@ATMOptions1]

Great video, thanks for the throughout explanation,

[@Model_Rockets]

very informative and well done, thank you so much for the information..

[@jeddesselle2611]

Great explanation and information. Thank you!

[@PassiveIncomeInvesting]

Glad it was helpful!

[@jacquesfournier4616]

My experience with those close end funds is that if you don't reinvest the distribution, and be able to buy the NAV, they keep going down, down and down again! Since the beginning of 2022 I am loosing over 30% with them! Horrible 😩

[@PassiveIncomeInvesting]

not horrible, look at the total return. that's all that counts. you need to look at total return, not share price return

[@jacquesfournier4616]

To catch up a 30% lost you need over 40% to recover! The distribution is not enough, the asset price as to go up also. By the end of the year, clm may achive a 20% up if things are going well. To compensate I need to invest the distributionin a hyper risky product like klip! I it works, my lost will disapear! In two to three years it should be offset. It is a good thing that I don't need the money for now. 😉@@PassiveIncomeInvesting

[@jacquesfournier4616]

I tried another way of looking at CLM. Using CPAM with 10 year US tresory at 4.2%, I get an expected return of 9.84%. If I add the latest yield of 8.83% we get 18.67% total return. Of course, I asume a lot of things, and maybe the model used is not really good for CLM, also I don't assume driping and reinvesting in the fund; with that return, I would catch up, if things goes right, in 1.6 years! Not too bad...I can wait.😁

[@ricomajestic]

@@jacquesfournier4616 What is CPAM?

[@jiti5034]

@@PassiveIncomeInvesting What is the net outcome

[@razorrook218]

so question, why are you still in $RIV isn't it the same thing? DRIP at NAV

[@PassiveIncomeInvesting]

RIV is trading at a discount right not, not at a premium, so it better be dripping at market price :)

[@williammmmmmmmm]

What i dont understand is if it trades and set up like the sp500 why did the price drop so much over the years

[@PassiveIncomeInvesting]

Dividends

[@debbieparisian4792]

CLM follows the Nasdaq and CFR follows the S&P

[@just.bob.j]

Why did these two funds lose about 95% in value in 2007?

[@PassiveIncomeInvesting]

the 2008 financial crisis i guess

[@just.bob.j]

@@PassiveIncomeInvesting but 95% and never even come close to returning to that price? That's insanity...

[@jiti5034]

@@just.bob.j Yes so my question is what good is the dividend when underlying is loosing so much?

[@ArtemShaban]

Perfect video!) thanks!)

[@PassiveIncomeInvesting]

Thank you very much!

[@doughoad3610]

I doubt they will be doing an RO this year when they've just about covered their 21% NAV distribution policy since last October 31st.

[@Icecold0505]

Do any Canadian Brokers DRIP at the NAV?

[@jacquesfournier4616]

I am with Disnat, because selling or buying is free, but they did not even know how to deal with the right offering on CLM! I had to send them CLM news so they gave me the right price!😏

[@jimmynguyen3435]

@@jacquesfournier4616 so Disnat does the DRIP @ NAV?

[@sainitoronto]

Thank you Adrian for the detailed information 👍

[@Fidelb33r]

DRIP at NAV can also be achieved by doing a DRS transfer to the transfer agent. This way you don't have to switch broker A DRS transfer can be expensive depending on your broker and it takes time

[@billyjenkins3672]

Fidelity is registered and they automatically do it

[@PassiveIncomeInvesting]

yup i heard they do

[@jasoncowan4357]

this seems iike a great investment, its like buying an index but getting a dividend!

[@smallmj2886]

I sold my off my CLM position almost a year ago at $10.06 I took a loss on it, but I felt that the distribution policy was too aggressive and would lead to a long term ever decreasing income from the fund unless their was another extended bull run in the market. I can handle a volatile stock price, but I want more stability in the distribution.

[@PassiveIncomeInvesting]

fair reasoning!

[@disco4535]

What does it matter if you DRIP at the NAV and are getting a 20% yield (or better if timing the rights offering)? They've never stopped distributions. Why not just hold and continue to build the position for years?

[@thriftyniftyfun]

fund has been around since 1973

[@welditful]

I remember asking a question about this fund on the Facebook page and getting every bloody idiot commenting on it and simply not answering the question. Left the page because of the crap coming out of people about this fund!

[@HamiltonRb]

Nothing personal my friend, but if you ask random people for advice on anything financial, you might as well just ask a cab driver or your butcher, because they are just guessing as well.

[@PassiveIncomeInvesting]

yes.... CLM tends to bring out the idiots out of the woodwork.

[@jimmynguyen3435]

Wondering which Canadian brokers you know for sure don't DRIP @ NAV. I'd love to go around and ask them if they do and it'd be helpful to know which ones I can definitely rule out.

[@PassiveIncomeInvesting]

i think all of them do NOT DRIP at NAV as mentioned in the video

[@dr.detroit2877]

It appears that Schwab doesn't drip to the NAV either. 😢

[@ksteam5095]

Correct. Schwab does NOT drip at nav. My accts were switched over from TDA. I called and asked fidelity and was told that they do whatever the fund instructs them. In this video, Adriano shows that it is the fun policy to drip at NAV so I guess I’m switching to Fidelity. Although I may call Schwab tomorrow and ask them why they don’t abide by the funds guidelines.

[@PassiveIncomeInvesting]

wow that sucks! i thought it did.... sorry that i mentioned that broker in the video !

[@ksteam5095]

@@PassiveIncomeInvesting yes it does. I was really loving the extra 20% pop every month.

[@davidlj3]

Yep, I just got off a chat with them. They said Schwab doesn't participate in any DRIP programs since February. I just turned off my DRIP for CLM and I'm going to put the dividends into something else every month.

[@johnferry5926]

Although my Bank will not allow me to drip at the NAV, I could still play the Rights Offering by selling my shares once the RO is announced then buy back my shares back after the price falls

[@PassiveIncomeInvesting]

true... you can play CLM that way

[@thewheeldeal8439]

Adrian did you drip it at nav when you were with TD webbroker?

[@PassiveIncomeInvesting]

nope

[@DirtyInvestor87]

Should i sell all my cornerstone stake becuz im black?

[@PassiveIncomeInvesting]

?? - money does not discriminate

[@DirtyInvestor87]

@@PassiveIncomeInvesting 🤣🤣🤣

[@samerrmr381]

Very good video Adriano. Informative and clear. Thank you

[@PassiveIncomeInvesting]

My pleasure!

[@mgman71]

DRIP your shares, sell when the rights offering is announced and buy back after the right offering is completed. Otherwise you'll get burned

[@PassiveIncomeInvesting]

that's a strategy that could work as well but it doesn't change the fact that the best way to ply CLM is to drip is long term at NAV and also participate in all RIGHT OFFERINGS

[@camille2872]

I had no idea CLM could drip at NAV !!! Unfortunately I am qith Questrade. C'est la vie.

[@PassiveIncomeInvesting]

ben oui ! lol

[@nidkusuwan2503]

You answered all my questions that I hv on this stock. Thank you so much.

[@matthewfoisy8087]

Why has this done so bad this past when the market has done well

[@PassiveIncomeInvesting]

you are mistaken . dont look at the stock chart, children do that

[@Truck--kun]

I sold for a small gain before the ex date. Felt like it was getting too expensive, I’m waiting for next RO before getting back in

[@davdride4850]

This is a great details on CEF. Great lay off

[@jiti5034]

I did some calculations 1) Bought at inception in 1987 $121, current value June 24 = $7.8 total loss = -113.2 dividend received = $307 So total profit over 36 year s= 8.52% PA , 2) Bought worst case $ 156 in Dec 2006 current value June 24 = $7.8 total loss = -148.2 dividend received = $87.4 = Total loss over 18 year s= -60.8,,,, so am i missing something

[@lbjmedia2151]

Yes. You missed reinvesting your dividends.

[@jeremybrummel3254]

I'm a QQQY guy, myself.

[@JetDriver77]

CLM is the S&P 500 and CRF is the Nasdaq.

[@PassiveIncomeInvesting]

really? they looked the same last time i checked

[@JetDriver77]

@@PassiveIncomeInvesting CRF is a bit more heavily weighted in technology. They are close, but different. Honestly, you probably wouldn't know the difference if you invested in one over the other. I have them and I mix them 50/50.

[@anthonykathleenkennard3933]

Are CLM and CRF core positions for you? @@JetDriver77

[@fabricadecuero4944]

Dripping at NAV is not an issue when my yield is over 19% in my RRSP

[@bentobox7788]

Except it's not sustainable. The distribution is half of what it was 5 years ago, and that's before inflation.

[@PassiveIncomeInvesting]

you clearly dont understand CLM. if it resets annually at 21% of NAV is infinitely sustainable , did you even watch the video? if you would spend less time commenting and more time watching ....:)

[@bluecollarbullionballer4269]

Thx for the video sorry you cant get the nav drip.I called schwaub and made sure my drip was on nav they confirmed.Happy investing/stacking.

[@PassiveIncomeInvesting]

Lucky you !

[@PassiveIncomeInvesting]

Lucky you !

[@blanksy_-]

I also sold all my CLM recently .. better US funds now.

[@disco4535]

Like what?

[@DavidWebsterAD]

I lost everything on this. Not worth selling. Did you ask TD if they DRIP at NAV?

[@marclandry638]

I asked TD(one of my brokers) and they will not drip my shares at NAV

[@joinjen3854]

Why are you losing? Did it go to zero?

[@MikeDD86]

Didn’t say what he bought instead but had a time stamp “what did I buy instead”. Instead put “I’m not telling you what I bought because it’s none of your business unless you pay me” haha

[@PassiveIncomeInvesting]

if you cant afford the 3$ you can always wait until the next portfolio unveil haha

[@Soldjaguy]

Long term hold it’ll grow big time next 10 years

[@williamstoker8027]

I don’t like ROC.

[@PassiveIncomeInvesting]

only somebody who doesn't understand it would say nonsense like that

[@nintendoplays584]

❤❤❤

[@asblacktowhiteassnow]

You should get sued for a video like this!!! Last time you did a video like this woth DFN and you made the stock dump and now look what happened to CLM AND AS A RESULT IM TAKING LOSSES 📉 You have a lot of ppl following your every word, don't announce your biases. You will get sued for this man. You have lost my respect for doing this

[@PassiveIncomeInvesting]

if you think a tiny YT channel with a video that got about 5k views can move a 1 billion dollar fund: you have a distorted sense of reality. you think I should be sued? lol... for what? Elon Musk tweets one word and it can more markets, nobody is suing him. You should try maybe, see how it goes

[@Casper7878]

You should never follow someone who picks stock base on the highest yield. It never ends well for investors. Take this as a lesson and move on

[@efullname]

​@@PassiveIncomeInvesting "following your every word" is a theory, DFN & CLM and other stocks crash is an opportunity to increase my monthly income, how i wish you can influence the market...

[@joannapatterson4625]

Are you serious? Adrian always says do what works best for YOU. Everyone is responsible for conducting their own research and due diligence.