I've Never Heard Closed End Funds Explained Simply, Until Now
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- čas přidán 23. 11. 2022
- Closed end funds are unique from mutual funds or ETFs for several reasons, as explained by David Stein from the Money For the Rest of Us Podcast.
David talks about the opportunities for individual investors with these unique investment vehicles, and how you might buy some with a discount to intrinsic value.
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There is a bit of a myth about buying a CEF below the NAV at a discount. You have to look at the long term history of the share price. Some of these CEF's sell fairly consistently above or below the NAV, so you might buy at a discount, but anytime you go to sell that stock, you may very well be selling at a discount as well, or you may worry that you are buying a stock at a premium, but then you may be very likely to sell that stock later at a premium.
I am starting to move money into closed end funds so that I don't need to sell any of my individual stock positions.
He is explaining BSTZ, high discount on NAV, great opportunity with blackrock
Speculative but looks attractive. Will have my eye on it but rather buy BST for the track record.
I just love how you explained it.
What are your thoughts on CLM thanks.
I did some calculation on it's sister fund CRF ( base don SPY)
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
@@jiti5034
Quick search stock split 12/23/08
4 to 1
Then split again
12/29/2014
4 to 1
The dividend drip at the nav.
CLM current price $7.49
NAV $7.05
Dividend payout monlthy. If you set it on drip dependent on broker.
You would buy the shares at the Nav $7.05 instead of market price $7.49.
Discount 6.24%
Some people wait for rights offering to buy them at discount.
Too much to wrtie.Check other youtube video and reddit etc... clm and crf.
There's strategy of when to get in and out using Rights Offering.
These are not good investments . They’re conduits where the manager is the winner with the fees on the levered assets and in a lot of cases shareholders are just receiving a lot of their own money back in contrived return of capital monthly dividends . A good example is the double whammy muni bond cefs have reaped from falling bond prices and distribution cuts because of increases borrowing costs . Think nuveen has missed any management fees ?
BS!! You need to research CEF's a whole lot better! (with all due respect)
Seeking Alpha has excellent articles to read. Many different writers. Take with a grain of salt, but read them all.
Oh, and return of capital is in most cases, not a return of your investment money.
Read.
ROC is an accounting technique which is accepted ( for over 100 years i believe). CEF sells, then buys similar investment back. You win at tax time! Only a handful of really badly managed CEF's literally return your cash.