When it comes to investing for the long haul, we contrarian dividend investors take a different approach. We like to hold on to our CEFs, many of which yield 7% or more and pay monthly, through rising and falling markets. (I’ll reveal three such funds, with yields up to 9.2% and trading at bargain prices, inside.)
If you’ve taken a look at the stock market’s historical returns over the long term, you’ll know that they come in around 7% on average, in dividends and price gains, depending on the period you’re looking at. With our CEFs, we’re matching, if not beating, that figure just in dividends.
There’s a lot more to CEFs than dividends, though. These funds boast a built-in indicator that’s unique to them called the “discount to net asset value,” or “discount to NAV,” for short. It tells us exactly when a CEF is cheap and when it’s pricey.
This post appeared first on Contrarian Outlook.