What Makes Closed End Funds Dangerous? | Stock Market for Beginners

Closed-end funds are a favorite of dividend investors but what are you really getting with these investments? The truth and some of the risks in closed-end fund investing will shock you. Watch another Stock Market for Beginners video here: • Why the Efficient Mark...
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Closed-end funds usually offer the highest dividend yields and can be extremely attractive to investors versus open-end funds like ETFs. You can often buy the shares as a discount to NAV with the potential to make big returns when selling the funds.
But you absolutely need to know what you’re getting and some of the downsides to closed-end mutual funds. That discount to the net asset value may widen which means you could end up losing money on these investments. There are also big risks in the amount of leverage fund managers use to increase dividend yields.
I’ll detail all these risk and more in this video as well as compare closed-end funds with more traditional exchange traded funds. I’ll explain the types of mutual funds and show you how to decide which you want to add to your portfolio.
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Closed-end funds can be good investments if you know the risks and how to pick the best fund. I’ll be using an example fund to walk you through everything to watch for when analyzing these types of funds. I’ll show you how to find the expense ratio and any hidden fees. I’ll show you how to compare closed-end funds and mutual funds to pick the best for your portfolio.
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Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.

[@josephhogue]

Don't miss these five highest-yielding dividend stocks RANKED! 🤑 kzbin.info/www/bejne/q5eYhI2rga6qeZo

[@Eduardo-yh3rv]

You can find many CEFs that are not increasing their NAVs just like there are thousands of stocks that are negative and have never recovered but the thing is finding good CEFs is not as easy as stocks because there is a lot less exposure. I was very skeptical of CEFs until I read some material on them and did some research. I think there are still good CEFs that have made better or close returns on S&P with less volatility. Another important thing is when considering Dividend Reinvestment or a DRIP, a monthly compounding of a stable 6 to 8% distribution yield comes really close to most if not any of the best Dividend Stocks (agreeing that it must be a quality CEF). But another plus I think is the following if at any moment you wish to tap into your dividend income you got an immediate higher yield on your portfolio. I wish to know your take on this.

[@jonathonblackmon2763]

Thank you

[@nicoxzavier3457]

Instablaster

[@stangtrax]

@@Eduardo-yh3rv I am thinking the same thing. I'm looking into CEF myself. I came across GOF with a 12% annual yield paying out monthly. The chart going back to 2007 looks flat, but 2008 it recovered fast. Funny as he mentioned 2008 but didn't mention the drawdown comparison to the S&P 500. He seems to be mixing capital gains with income. I am doing growth as in capital gains now, but looking for a steady passive dividend income like GOF etc. What CEFs do you like? Also when I retire I will not have 35 years like his video to worry about that.

[@christophdenner8878]

If a closed end fund pays me a 12-15% yield, I'm totally fine with having no share price appreciation and a total expense ratio of 1-2%. When seeking high monthly cashflows, this is the direction to go.

[@stockholmpublishings2937]

Check out DFN.

[@christophdenner8878]

@@stockholmpublishings2937 Thanks, I have this one.

[@JJason406]

@Wade depends on your tax bracket

[@christophdenner8878]

@@FlounderVFW You have to buy those ETFS or CEFs that don't lose share price equity, eg, JEPI, JEPQ, TXF, and the like. JEPI even outperformed the S&P500 recently, while providing a 11% yield with 0.35 expense ratio.

[@christophdenner8878]

@@FlounderVFW Because I wanna retire as soon as possible, hopefully next year. I need cash flow NOW, and not only in 10 years.

[@sfarhat3294]

Another capital appreciation focused video when they miss the point - we want that income stream

[@desiple1190]

What do you expect from a jahudaa.

[@mmmar7317]

They are literally perfect substitutes though

[@paulsantori8920]

Exactly we want the income stream for PII. Passive income investing.

[@chenz3007]

EXACTLY!!!

[@Coolnesski]

Long-term CEF investor here to tell you Nuveen is a terrible example to start with.

[@krakhour2]

That vanguard fund your talking about pays little to no dividend you have to wait till your old and gray before you can get any money back where as the closed end funds pay very high dividends that you can use while your young to do fun things and purchase other things that will appreciate like art, houses and etc. You put that onto the return and it beats your VTI everyday and twice on sunday

[@Rodwebify]

I'd like to see a comparison of BST or ASG to any ETF. You just need to be smart about how you invest and do your research. Buying and holding CEF's are a great add to any portfolio IMO

[@ryanl2576]

BST and ASG seem to be two of the best. Zero to low leverage, and ASG has a long track record. Cap appreciation isn't the focus but buying at the right time is important. A tax advantaged account also helps.

[@johnwzimmer405]

I would just say one has to watch the fund (any) to verify a trend and cycle out if the trend is broken. I would not hold any fund that breaks the 50 or 100 day moving average. CEF's can pay 8% (after fees) and payout dividends monthly so can be part of an actively traded portfolio. Great job pointing out the pros and cons.

[@staywildventures763]

Thanks for this. I am from Canada and notice the same thing happening in the Bitcoin ETFs vs Closed end funds. The closed end funds are now trading at a 10-15% discount.

[@ADAdams-wn1nc]

Thank you for the beneficial video. What website did you find the charts for NEA on at 2:24 thru 3:18 in your video?

[@robertcrotty9000]

So much for the video. Suffice to say that when you buy CEFs, do your due diligence first. I prefer buying CEFs for increased dividends, but there's nothing wrong with being a longer term investor in CEFs, so long as you put in the time to keep your pulse on market trends and are not afraid to pull the trigger if dark clouds begin the form.

[@tienzomby93]

I thought you recommend us to jump into CEF cuz of the dividend. Is the dividend high enough to adjust the expense ratio

[@leomalino2364]

You are correct about CESFs requiring timing. They have to be held through market cycles to pay off. I did own one Nuveen CESF. I buy them at better than 10% discount. I sell when they are at a premium. My total return is the dividend, the discount recovery, the premium, plus the NAV appreciation.The ones I've sold were about a 90% price increase. I've currently repurchased some I formerly held since their current price is almost half what they were when I sold them and they pay a respectable dividend. P.S. I take the cash dividends; I don't roll them back into the fund.

[@erikjeanes8359]

How has this strategy been going now?

[@chenz3007]

Bravo! i screenshotted this screen on my imac to keep your brilliant comment! I pull up these vids to get outstanding insightful comments such as yours.

[@maryloulou370]

Thank you for taking the time. Very informative video. I will subscribe.

[@TheMachLove]

Love this channel. You have a video for everything!

[@LuisGutierrez-tz7cq]

What about dividends? A lot of these CEF have big dividend yields, but you didn't mention them. It'd be great if you could give your thoughts on this.

[@bobshaw8112]

Luis Gutiérrez I have the same question. CLM has been paying a 20% dividend return. I admit I don't fully understand intricacies of CEFs but am interested to learn more. Perhaps Joseph Hogue can enlighten us.

[@M.-.D]

Yeh, he mentioned the leverage but in combination with NAV discount would result in heavy dividend returns. The other difference with CEF is the managers are sometimes performance producing. Mutual funds are known for supporting poor executive compensation packages and excessive buybacks at extended elevations. CEFs can rally against this destructive short term approaches otherwise incentivised by the market. Bill Ackman is a good example, he had a down period with his shorts approach and big miss on his pharma bet but has since returned to value creation as his investing ethos. CEF is to facilitate long term bets that does not rely on investor commitments - this facilitates significant NAV discounts when sentiment changes.

[@wernerschonenberger7668]

High Payout is what I am looking for in CEFs! Also check for BVPS or NAV that shouldn't decrease over time otherwise you're just getting the invested money back over time! My favourite CEFs are UTF, UTG, BST, BME ... but Covererd Call ETFs like QYLD, RYLD, XYLD are a nice alternative

[@og1kanobi40]

They pay distributions vs. dividends I believe.

[@krakhour2]

yeah if you want xtra cash. How much will that cost you to get it from anywhere else. * percent....10 percent.....Ive seen people put it on credit cards for 27 percent. CEFs only charge 2 percent and rarely cut dividend . Most of the time they raise it

[@bsdgffishtuna5186]

Offtopic: Does anyone know anything about $MINT - it's a bond etf that yields 1.42% a DAY? how does that work - you buy the etf and then sell a day later for the same price and? i'm just curious.thank you

[@Rob-ob3sh]

What about the 10 to 12 percent monthly dividend you are collecting? You did not mention that did you

[@jackdempsey3677]

A quality video, on a type of investment class not often talked about. That being said.. One thing you didn't mention about the expense ratio charged by (CEFS) is that when you buy into them at a discount, the expense ratios are essentially paid for. I believe it was the president or CEO of General American Investors that clarifies this point, when talking about his own shares and that of his families in the GAM closed-end fund.

[@sankalp3513]

You can reinvest your dividends and compound them to create an income factory that grows over time to match the total return of typical dividend growth and capital appreciation portfolio.

[@Floyd_Steel]

Do you invest them in a standard brokerage account?

[@timothyphoenix4209]

This was very helpful. Question though, you state that the assets in a CEF are fixed. I'm a little lost on that part, are you saying that securities are not adjusted in the fund from inception? That seems... not correct.

[@jaehus1971]

Joseph, I usually think your very good but I feel that you are grasping at all the long things with closed ended funds (ie Investment Trusts in the UK).

[@Greenmick6982]

Great video to watch before you jump in! Thanks Joseph. Im about to sell my position in NUSI and go in on equal value for CLM and CRF and just let them DRIP before I snatch the dividends after a time. This information is great to have in mind when I turnover some of the portfolio. Cheers.

[@ValueForInvestors]

I’ve stumbled onto your videos a few times... this one won me over and made me subscribe! Thanks for the insight into the closed end fund universe!

[@zoraster3749]

I was just researching these; perfect timing!

[@shekharmoona544]

I was looking at pgz because of its dividends.

[@DiddyKatt]

Shekhar Moona have you invested in it yet ?

[@shekharmoona544]

I think they can be useful if you needed he cash flows quickly. Depending on the fund.

[@theyuha]

Interesting discussion, these can be a big risk if you buy at the top of the market. We may be at the bottom so they may be much less risk especially if they are paying stable or rising distributions like CCD is paying. The distributions are more for convenience than income, some are just your own money being given back to you it seems. Some distributions may be taxed a lot if you are higher income.

[@allaboutmoviesallaboutmovi8545]

What is your opinion on swing trading funds like PHK,PFN,PFL,PYN,PNI,PZC.PMX,and PNF ?

[@MonkeySpecs301]

what if its the opposite such as GOF, nav is 17, but trading around 22.

[@sherwoody7580]

Happy to see your channel grow!!! What do you think of PDI as a monthly purchase with a 7 year time horizon? Aim is lower risk for a planned purchase.

[@jupitereye4322]

We need to take into account market sentiment. If the market is trading sideways or it is on a downtrend (for example during the 2000s) many investors would consider "safe dividends". The market has been progressing somewhat well in the past few years, but...

[@leesmith9299]

it may seem like i'm arguing as pro closed ended but i really have a balanced view. horses for courses i think but these things just did not make sense to me so i thought i'd query... 4:36 i don't think it's fair to include the interest cost when comparing. as you say later in the video that interest cost comes with more assets which make returns making up for the interest costs. of course it means extra volatility as you say but long term a cost worth paying if an investor chooses and understands the risk. 6:58 Does that chart really not show the expense ratio? here in the UK all fund charges and costs get built into the NAV which influences the market price. I feel like it would be administratively difficult to take the expenses from the shareholders separately.

[@wvb7119]

Many CEFs get crushed on price over time. Check the GABELLI products for reference. Not to mention continued lowering of distributions

[@robertbarry1792]

What is your opinion on UTG?

[@Drganguli]

How about RNP and PDO? They give monthly dividends

[@andrebond5429]

im hoping to use close end funds for divided diversified portolio, will watch my back after this video, thanks

[@oleboy4332]

Appreciate the video and like your channel, but I’m all in on huge dividends with fees! I’ll take a 40% dividend with a 2% fee all day

[@haris000000]

Hello Mr.Joseph A video request. When you buy a stock at a price you deem fair and if the stock takes a dive down not because of fundementals being wrong but just because of market fears and so on ... how do you average down? Do you wait for it to drop 10% before buying or do you wait 20%, and with that how much do you buy next time? I am confused as how you would average buy a stock thats in a downtrend, are there any formulas or whast the process? Thank you.

[@josephhogue]

This video will answer your question as to whether you buy more, sell or just hold on - kzbin.info/www/bejne/qmikhXaifpaBrsk

[@haris000000]

@@josephhogue Thank you for the recommendation. It cleared up many things. One more thing, if I may and Ill be out of your way. Assuming you have a fixed sum of money, like 5K dollars or euros it doesnt matter. How would you allocate it? Meaning would you pour the whole sum in to an investment at once or would you do it in pieces like first one fifth of the cash then the second fifth and so on ... Do you just ignore it and buy the whole investment all at once?

[@JeffClegg]

Looking for feedback on my 1st CEF, PTY by PIMCO.

[@RebeccaEvans]

Helpful

[@jmea01]

educate me. If a CEF pays 8% but has a 2% expense ratio does that drop the gain to 6% ? Or is the expense ratio included in the 8% yield ? I've never seen this addressed. Thanks

[@hopelessdecoy]

the 2% is already figured in, your yield/gains would be 10% but the expense ratio drops it to 8%. There are some funds with a higher expense ratio than a return at times and usually hopefully temporarily and therefore you are losing money to pay for the fund.

[@sirradster4671]

How bad is EMO?

[@Wiglefish]

Income funds make 0 sense for growth. The point is you want the fund to make their own money but not grow share price, so you can reinvest the dividends for a massive dividend snowball...

[@robertbelcher1493]

Joseph, Great channel, can you tell me the best way to understand how Closed End funds fund their distributions? Thanks!

[@josephhogue]

Can be a couple of ways. If they own the investments directly then there will be dividends and interest paid. If they use derivatives then they'll just keep enough back to meet the distribution.

[@robertbelcher1493]

@@josephhogue How do you know when the distribution is a return of capital?

[@buffal1000]

You clown. Quit your obnoxious pan handling! What a complete loser. This is how you promote your fraudulent business?

[@ImYourKryptonite]

What if the price is over the NAV

[@dgballin21]

Any thoughts on USA Liberty all star cef? No leverage and 10% dividend?!? Also decent growth over the last 10 years. Consistent dividend payouts.

[@michaelgordon3241]

I've noticed USA is a buy in the 5.60s to 5.80s and a sell as it approaches the 7 range. The charts show everything

[@crypto2633]

Aren't they good for buy and hold for dividends?

[@amarowsky]

They're perfect for that. I was keeping a part time strategy for a while, of using CEF's interet paid monthly. To reinvest that dividend into SPY or VTI (broad based indexes) so my dividend income is being flipped to pay for growth. Wound up getting like 3 or 4 shares per month of VTI, using this strategy a while back. I understand his like and preference for low exp ratio funds.... But CEF's are supposed to compete with growth, they're income! At least he's trying to help people, and bold enough to try and rock a bow tie for branding.

[@MuzixMaker]

@@amarowsky And if you exercise that strategy withing a self-directed IRA, you're not paying tax on the divs either!

[@pascalladal8125]

It depends just like everything else. The trap is that you're not buying the underlying assets. You are buying the management of the leveraged underlying assets. If management and underlying assets are performing well, then you'll get high return, but you would have it also if you borrowed and bought these assets directly. In the past years, they have perormed well, because the stock market performed well. But with all leveraged investment comes higher risk, and they'll drop as quickly as they got up. The thing is that to buy a CEF is basically saying, I'm paying someone high fees to take high risk with borrowed money because I think he can do it better than me. Which comes back to what he was saying, it adds up another layer of analysis to determine if the management is really competent, on top of the actual assets they are buying and selling.

[@adadadatt]

This is utterly ridiculous. Don't believe everything you hear on KZbin

[@boyan.manahilov]

What about when the CEF expires? Aren't we going to receive the NAV of our holding, even that the shares are traded with discount? If that's true, the permanent discount price that you mentioned should not be a problem (if you are willing to hold the stocks until expiration of course).

[@martinweber202]

a actually not if you take the dividends and reinmbvestment them sure you don't get the upsides of an appreciating stock but you do get a steady income which retire people need

[@mingmingliu4187]

What website did you use to graph out the NAV vs. price over time?

[@bluesky5587]

Cef connect ..the Bible of cef investing

[@303Estates]

Great Video Joe!! Really good to see both sides of this interesting investment (CEF) Keep up the great work!

[@josephhogue]

Goodbto see after so long the vid is helpful. Always glad to help

[@charliewilson3528]

Closed end municipal bond funds. About the only thing I never lost money. Quite the opposite.

[@damemethief]

I currently hold a couple of Muni bond tax free CEFs, so far I'm satisfied.

[@Dmarcuz]

@@damemethief hello can you please share some of these funds? Thank you

[@TheBreamer999]

I have been generating $1600 a month with my EIT CEF for a few years now. I want the dividend. I bought below NAV at a discount, I'm pretty happy. That and the CEF's in my TFSA generating another $700 a month, it's a tidy income stream.

[@findmeanewplanet]

I was laugh to scorn on a FB Dividend investing page when I mentioned an article written by Forbes on CEF's because I said I wanted the fastest and safest route possible to earn a minimum of $2500k+ a month or $30k a year plus in dividends. I didn't want to wait 30 more years, I'm 48, by investing in Index Funds and ETF'S alone. I needed a way to generate that $2500+ or more a month quicker. The group was inflamed and outrage by my audacity on a more efficient way to gain dividends quicker. If you don't mind me asking, how long did it take you to reach those dividend returns? Invested amount? Lastly, where did you go to become very informed/knowledgeable on how to invest in CEF'S?

[@Chris-dw6cu]

@@findmeanewplanetincome investing is not common nowadays and not very well understood so that may explain their reaction. I'm assuming they invest in dividend stocks, which is a different ballgame. But did you mean earn 2500 a month in dividends and distributions? That is very possible with passive income funds. But I was a little confused about your objective because you say "$2500 a month PLUS dividends" - it shouldn't be plus, it would be the dividends providing that income

[@Shavier777]

New subbie!! 😀

[@LarsonFamilyFarm-LLC]

Thanks!!!....I'm sold off from buying any closed end funds....you kept me safe.

[@HansGruber_777]

Isn't the expense ratio on CEFs deducted from the NAV and not debited from your personal account holding?

[@josephhogue]

Yep, they take expenses out of the NAV (fund assets regularly). Basically same idea, goes to lowering the NAV and your holding value.

[@nibblecookieco.5801]

@@josephhogue NAV is net of expenses. “Net” Asset Value. If the market price of a CEF and an ETF are constant and the distribution on the CEF is higher, you’d get a better return from the CEF.

[@williamstoker8027]

You only giving one side why to own a CEF. I watch the ROC of a fund. I stay away from ROC.

[@kaydens6964]

What if we are not interested in selling? Those funds are where I dump growth stock profits lol And the cash flow is insane in this market environment, back to growth we go. Theres no such thing as guaranteed capital growth, any investment has its risks. Look at Baba and Meta for example.

[@pteromalid]

Thank you! I was thinking about buying CLM.

[@josephhogue]

Sure thing! CEFs can work in some markets but very risky during market shifts.

[@g22expert]

I bought CLM and CRF a few months ago and now I’m up 20%. The dividends are going up next year too. I’m really happy with them.

[@GenExDividendInvestor]

lol @ the fund managed by the love child of Buffet & Lynch. I'd adopt!

[@josephhogue]

Hell yeah. Lottery Ticket!

[@haris000000]

I was going to comment on that :)

[@bastianstieg819]

Thanks great to know! How are fees in ETFs and CEFs paid by me? Are they deducted from the dividends? Keep up the good work

[@josephhogue]

Do you mean the expense ratio you pay or the dividends paid to you?

[@treygraphicsfte6747]

Let's Talk Money! with Joseph Hogue, CFA Vaseline expense I’m curious about

[@buffal1000]

You clown. Quit your obnoxious pan handling! What a complete loser. This is how you promote your fraudulent business?

[@devans4213]

Buffet and Lynch fund lol, that's a good one. You look like your around my age. What percentage of my portfolio should be bonds at our age? I'm thinking about going just regular boring government bonds.

[@josephhogue]

Besides age, it also depends on your portfolio size relative to how much you need (i.e. if you have enough set aside to take a little more risk or if you need more protection) and your own personal tolerance for risk. I have about 15% of my money in bonds right now, maybe a little lower than some would suggest for my age but I also diversify across p2p, direct real estate and funds as well as a few other alternative investments. If you're only in stocks and bonds, you might want a little more than 15% in fixed income at this point.

[@buffal1000]

You clown. Quit your obnoxious pan handling! What a complete loser. This is how you promote your fraudulent business?

[@jonathonblackmon2763]

Are you saying that all close end funds and bdc companies are bad or do you have some recommendations thank you

[@josephhogue]

Wasn't talking about BDCs here, only closed end funds. Generally I'm not a fan though I'm sure there's good funds out there. They can do really well in a strong market or falling rates because of the leverage used. Problem is they aren't good long-term investments because tend to underperform on the downside. I like some BDCs and have recommended a few on the channel. MAIN comes to mind.

[@ewlinitis]

@@josephhogue they underperform because they pay dividends no?

[@chimerunner5411]

Great video with great content! keep it up!

[@noiceman]

Interesting video. I am curious, however, how a family friend has made tens-of-millions of dollars over the past 30 years investing in CEFs. Does he perhaps have insider knowledge on which CEFs are going to do well each year? Of course, he took a big hit during 2008, but before and after he's made millions a year trading CEFs. Maybe if you study the market and keep an eye on the portfolio characteristics of each CEF you invest in (i.e., the stock holdings of the CEfs), you'll end up doing well. How would you explain his success?

[@cubertmiso]

did you get any insight on this? i can't see that working out in bear. only if you pick absolute tops and bottoms maybe but can't know for sure is those millions are 1.01x or 2x up

[@noiceman]

@@cubertmiso It definitely doesn't work in a bear market. They've been out of CEFs for a few years now. Just using boomer Vangard stocks at the moment, waiting for a good time to get back into the market. I my self am just trying to save cash so I can buy in after the big correction. Best of luck to you brother.

[@cubertmiso]

@@noiceman back to you fren.

[@andrewsheldonreeves]

Please review ROYT. I own tons of that trust. I'd like to know what you think of this monthly dividend stock.

[@josephhogue]

Will check it out but I usually don't cover stocks with a market cap under $500 million. Just too small and too thinly traded.

[@davidlima1645]

Bitcoins And Blockchains don’t invest in that garbage, pick something that has minimum 5 year growth, better 10 year growth, 25 years of growth best. APPLE, Microsoft, Etc 👍 Earn yourself a hefty gain that beats the s&p500 every year in a quality company instead of a penny stock that’s losing 20-30% in value a year

[@a-a-ronbrowser1486]

So proud to see another Marine out doing great things!

[@josephhogue]

ooh-rah brother.

[@erikt3162]

What a coincidence I just heard a closed end fund from the radio Dwight & Dunn offering investment of ROC 5% only available for accredited investors. Have you their fund? I was skeptical since I never heard of mixed stocks and after learning what return of capital is it just screams “High risk,”

[@josephhogue]

Yeah, not sure why an accredited investor would want to invest in a fund with a 5% ROC when they could invest in private equity for 12% or more.

[@sss1st]

Income with no federal taxes???

[@michaelgordon3241]

CEFS are trades not long term holds but they enable potential for high levels of income and capital appreciation. They are not set and forget investments but neither are most stocks. There are many garbage closed end funds out there. Severe market underperformers. However, Ive made some excellent returns trading some of the most widely criticized cefs out there. With a fraction of the capital you can obtain the same level of income as a multimillion dollar portfolio. Considering less than 10% of all retirees in the US(and probably Canada) save 1 million for retirement, I think the extra work is worth the trade off or some people would never be able to retire.

[@LB-jw3ly]

Basically USO has became a closed end fund

[@CatholicK5357]

Considering that Kevin O'Leary endorses close end funds, it seems good to me.

[@DARTHDANSAN]

Thanks

[@josephhogue]

Always glad to help. Thank you for being a part of the community

[@krakhour2]

Thats not true they have Rights offerings all the time and can issue shares to people who have them.

[@mehrshadvr4]

But they pay a lot more dividends. Clm pays $0.18 per share a month.

[@krakhour2]

Not suppose to sell them anyway..........Keep them and use the income

[@toddliveringhouse5808]

You need to be more careful regarding expense ratios. Your use of percentage for vanguard expense ratio is not correct. 1 basis point is not .1 percent.

[@majybah]

I bought your book step by step devidend investing

[@josephhogue]

Thank you. Let me know if you have any questions and thank you for being part of the community.

[@majybah]

@@josephhogue thank you for having me and thank you for sharing your experience with us.

[@rich8304]

I'm 69 and buy cef for the monthly income ,if you keep the average share price close your fine. Income is key. There is certainly a time to be conservative when your a young investors By the way I also own ,O, MO, vym ect.

[@josephvirgallito7817]

Are closed end funds OK to own as a young investor or should I do it once I am an older investor?

[@Chris-dw6cu]

@@josephvirgallito7817they're good to own any time if your objective is income. If you DRIP the distributions you will compound your money

[@brennans8680]

Excuse me sir. Aren’t CEF considered good long term investments because of the dividend income? Please respond. Thank you for your service.

[@amarowsky]

lol at 7:00 - 7:15 , he basically ruins his argument because it's the only time be brings up the dividend. And the fact the dividend (4.6) washed out the ~2% from the expense ratio. Also I'm much more familiar with CEF's that basically Track sP500 (mega cap's) and pay closer to 9-12% dividends on a monthly basis. The fact that the value of a share of the CEF doesn't fluctuate is a feature and not a bug. These are meant to trade an unlimited Ceiling, for a much higher floor. And all my CEF's paid just fine through the 2008 recession until today *(including the march plummet in 2020). You're observations of his video parallel mine, he's dancing around the ONLY(or at least Primary) reason to buy these damn funds lol.

[@Lightsydephil]

@@amarowsky which CEF pays monthly at 12% and that doesn't fluctuate regarding on how the market does?

[@LuciferArc1]

@@amarowsky what do you think of VGI?

[@LuciferArc1]

@@Lightsydephil I've been investing in VGI. I have $116 invested and looking at a return of $1.4 every single month. This is about a 13% return. For the year mind you

[@amarowsky]

@@Lightsydephil Personally I tend to use Calamos funds. But they're not doing anything crazy. Aberdeen has some CEF's that are interesting and have been presented to me before. But the one's I'm most experienced with are the convertible CEF's from Calamos, more specially CHW, CGO, CHI, and CHY. Currently they've been on a tare, and are trading a lot higher on the NAV, so the discount is not there like it used to be.... (lions share of my cost basis purchases were in the mid $7 and $8 dollar range on CHW, which pays $0.07 , monthly per share. So during May-Aug,2020, CHW was averaging 11-12% dividend based on the NAV at purchase price. Now it's in the mid $9's per share, so the DIV is closer to 9% , which is still impressive). They will fluctuate the div % based on the NAV that is trading. But they've essentially been 9-13% for the past 5 years of trading.

[@brettk9316]

Thanks I still like BST lol

[@oscarorta9152]

Can you talk about why banks have a limit on what you can withdraw and what are the most trustworthy banks in the nation

[@josephhogue]

I use Capital One 360, Ally Bank, and a few local community banks.

[@oscarorta9152]

@@josephhogue thank you i appreciate your reply ill be looking into that

[@Lightsydephil]

Is GAB a good cef?

[@Lightsydephil]

Can someone please answer this?

[@EdAtoZ]

Joseph, I am looking at a closed in fund (ticker symbol USA). An I can not find an expense ratio for it. And they seem to be getting ready to issue a lot more stock. Does not seem to be a good idea to buy at this time. But keep showing up on other channels list of dividend stock because of the 10% dividend return. I think it is a trap because of the extra stock ending for the market in 2022. I am wondering do you see any other problems.

[@irwinsaltzman979]

Need to do more research before buying any fund. The fellow has not covered all the types and characteristics of closed end funds as an 8 minute video is insufficient.

[@robertbarry1792]

What do you think of PCI?

[@josephhogue]

Both PCI and UTG are closed end funds which is almost always a bug no in my book. I know the yield is tempting but these are disasters when the market turns.

[@MuzixMaker]

@@josephhogue What makes them more of a potential disaster than any other investment when the market turns?

[@MuzixMaker]

@@NoBody11010 CEFs didn't?

[@escapedtheratrace3408]

Why not scalp closed end funds and collect the dividend if your trade goes against you temporarily. I don’t see how they destroy wealth when you receive income until you sell them above what you paid for them.

[@megalodon1726]

Many high-dividend closed-end funds have long-term declines in their share price, selling for a lower price than 10 or 15 years ago, so you can't expect to sell them for more than what you paid. You only profit if the dividends were high enough to compensate for the price decline.

[@danieljharris42]

I was looking into PTY which gives a monthly dividend of .13 for $16 per share. Is this not really great!? Am I over looking something. Also I’m using Robin Hood to purchase them, so how do I get charged the annual fee?

[@CrispyRS]

It’s deducted from the NAV, so you won’t see the fee

[@michaelgordon3241]

The fee is already included. I think cefs are best used as trading vehicles since many trade in predictable trading ranges or experience share price decline over time. For example, PTY now typically bottoms out around 12/share and under and tops out just under $15/share. It also only now pays 0.1188/share monthly. I love PTY but I think it's important to not only analyze the premium or discount to nav but also the technicals such as the 14 day RSI, slow stochastic oscillator, etc. I could only see cefs as long term holds if one were to invest in them and just accumulate the distributions for years. Just like covered call writing, you can use distributions/dividends to lower your total portfolio breakeven. For example, let's say you lock in an 11% yield on cost for your portfolio. If you were to let distributions accumulate for a year, you'd reduce the total portfolio breakeven by 11%. A nice cash buffer accumulated to buy dips also helps cost average down. They are brutal in bear markets.

[@GregK235]

Thank-you for a clear and informative presentation on the risks of CEFs. I hadn't looked beyond discount/premium to NAV; so, learning about changes in that difference and how it affects return was very helpful. Have to think about how any investment fits within a portfolio.

[@theyuha]

So are you saying if they are trading below NAV nothing is charged? it doesn't sound realistic especially if they need the money to pay workers or for expenses. I think they will get their money regardless.

[@noxiousnews]

Not a fan of "The Income Factory" I see.

[@joelbrock6830]

Brother - I have made an enormous amounts of income with CEFs In the past 25 years. Not many investors know of the value of CEFs and after listening to your non-stop speed speech, it’s clear that your knowledge of what they are is legitimate, but your strategy is flawed or non existent. CEFs predate open end funds and ETFs by many decades. The first CEFs were established in the late 1890s and have created wealth beyond any other type of fund. Your strategic knowledge is the problem. This video could possibly cheat countless of people seeking knowledge of CEFs from a very powerful money making tool. Be careful of making a huge mistake that could become a litigious nightmare for yourself. Good Day

[@MStar10]

I'm so confused. I usually like your videos. But you state the only way to make the high return is by selling and running the market?? I what about high consistent divdend like CLM? such a great omission in this video is a disservice. Pls pls respond. Thanks

[@ericbown1551]

Yeah Clm has tanked with a rights issue. Makes you wonder what’s going on, behind in the background.

[@desoztoppieter9895]

CEFs are a real barrel of worms, most funds, like 98% of them, lose stock price value over time, your only hope is that your distributions make up for the loss of capital.

[@thecroninagency]

This is misleading generalization about these products. If you know how to work it, you can crush it with his products.

[@djc283]

And yet you also praised cef funds , buy OPP fund , in another video

[@JOHNHSMITH2]

Exactly

[@stocksbwavy2711]

bring the intro back 🤔

[@chrisrobinson-cj6tq]

Can anyone help me if they read this? I bought into rivernorth, ticker riv.rt after watching some crazy swings for 3 weeks.I am not the sharpest tool because of brain injuries so I wasn’t sure what I’d be buying. Well, it was removed from trading yesterday leaving me devastated. I was given another what looks like a pink sheet ticker today(saturday nov 7, 2020) then was given an email from my trading platform (scotia Itrade) telling me I owe all this money to Scotia now. So looks like my investment disappeared then the bank also wants the same amount making me think I lost that investment but now have to double down with scotia(who I am SICK to my stomach of!). I sent a message to the company stating I have mental challenges and whats going on and they sent 3 links that MAKE NO SENSE to me. The remaining money in my trading account is now non transferable. I am SOOOO financially screwed now. Depressed. I made so many trading errors and now owe thousands of dollars. I am on a low income pension. The RIV ticker is up but not the RIV.RT. Can anyone tell me in dummy terms how screwed I am? The RT stock was a wild swinger and I was positioned to do nicely then BAM! Now I am at a double loss. Scotia already threatened to take the rest of my money from my account. I am distraught and feel dumb and hopeless. I also feel like writing this is futile as by the time I may get a response, the horrific inevitable would have already occured. I just can’t make sense of these issued statements as I am not very educated. Please and thank you to a well informed educated and clear thinking individual.

[@persieprince9345]

I think bst fund beats the qqq on the 5 years return for 0.9% expenses and 5% dividend

[@clgoptionseller]

Bow tie huh? Ok.

[@tubaljohn1]

I'm very glad I stopped listening to your E-4 butt. You haven't shown me anything, now you plan the stock giving me a 40% return.n