Remember when we heard it about 10 years ago? again and again Will the next few decades be dominated by China?
If you ignore that prediction and invest in established U.S. dividend payment US Stocks and Funds), you made a smart move.
We continue to believe that the US is the best place to find the best dividends, including our favorite high-yield closed-end funds (CEFs).
Here are 16 U.S.-specific CEF stocks to consider right away. We'll also take a closer look at two CEF stocks with a yield of 17% or higher (!) that you should avoid, and one stock with a yield of 6% or higher that you should be paying attention to right now.
First, going back to China, I want to issue another warning because things seem to be getting worse every year for people who are putting money into China.
In January 2022, I discovered that Chinese funds, including CEFs, Morgan Stanley China A-Share Fund (CAF)pointed out that it was a trap and “there's more”. many Additionally, it said investors are “still largely holding on to their Chinese assets, even as risks continue to rise.”
This prediction turned out to be a reality.
The 37.5% decline in CAF since then shows that these risks are still too great to make the country investable, which is why in February last year I said that China risks remain too high for investors to invest in US funds. This is why I wrote that it means that you should stick to. The majority of the portfolio is held in proven US stocks with a long track record of profits. ”
And while we are now seeing even more desperate measures (such as President Xi Jinping's outlawing of short selling), investing in the U.S. will always outperform investing in China when it comes to building long-term wealth. This is a good opportunity to remember that.
The good news on the CEF front is that at a time when U.S. GDP growth is strong, inflation is becoming increasingly subdued, and consumer confidence is rising, there are many high-yield CEFs that invest exclusively in U.S. companies. It's about existing.
Below are 16 CEFs with yields as high as 18% (!) that you might want to consider.
There's a lot of data here, but let's focus on the two highest yielding companies first. Cornerstone Total Return Fund (CRF)the payment is 17.4% and the yield is 18.1%. Cornerstone Strategic Value Fund (CLM).
These two funds prove that while we are bullish on the US in general, not all US stock CEFs are good investments.
As for CLM and CRF, while these large dividends look compelling on the surface, it is worth bearing in mind that both funds are trading at a significant premium to their net asset value (NAV). must be placed in Their portfolio has value.
These premiums are a warning sign because when a market rally hits a speed bump, the fund's premium tends to fall quickly, pulling the market price down with it.
And with the S&P 500 up nearly 4% this year just into February, such a short-term decline is possible. Therefore, this pair becomes a “NG” for us.
On the other side of the coin are the more affordable options. Gabelli Dividend & Income Trust (GDV), run by renowned value investor Mario Gabelli. As you can see from the table above, Gabelli's fund is also trading at a significant amount, trading at a discount of 16.2%, well below its long-term average of 10.6%.
The firm's portfolio is also a snapshot of America's leading companies, with headlines for the list of top 10 holdings: Mastercard (MA), JPMorgan Chase (JPM), Microsoft (MSFT) and American Express (AXP).
GDV also has a more sustainable 6.1% dividend yield, and its track record is impressive, with Gabelli and his crew more than doubling shareholder funds over the past decade.
Additionally, the fund's modest yield of 6.1% leaves room for dividends to grow. And that's exactly what it is, up about 22% over the past decade. The fund also paid three special dividends during this period.
That makes GDV a reliable source of income, and its dividend could grow further thanks to its historic earnings. And that could attract more investors, and the discount rate could narrow even further.
Michael Foster is the Principal Research Analyst for: contrarian outlook. For even bigger income ideas, click here to check out our latest report.Undying Income: 5 Great Value Funds with Stable 10.9% Dividends.”