IRAs and Closed End Funds

[gcgang]

https://www.cefconnect.com/User/Login.aspx

I’ve used Closed End funds (see above link) as tax inefficient investments in my tax sheltered accounts. I purchase at larger than normal discounts to NAV and sell when the discount narrows. As of today, I’m basically out of all of them because funds that once sold at 20% discounts now sell close to NAV.

Last two I sold are BIT and GGN.

Problem is, I’ve basically used laddered CDs as the core, and the Closed Ends were my speculative things. Now,I’m just sitting on tons of cash, unwilling to buy CDs at today’s rates and there seem to be no Closed End bargains that I like.

Bought a few dividend oriented stocks, but don’t really want to get more inEquities.

Don’t know enough about the preferreds some of you use to feel comfortable there. Guess I’ll slowly erode purchasing power sitting on cash rather than take on more risk.

 

[Montecfo]

Were these CEFs holding bonds?

Is that what you are looking for?

 

[pb4uski]

Preferreds are pretty easy to learn. I target issues rated BB or better since the bottom of investment grade is BBB and preferreds from the same issuer tend to trade a couple notches lower than bonds. Such preferreds typically yield about 5% today. I also have limits for how much I'll invest in any one issuer.

I currently have 53 different tickers the have a weighted average yield of 5.6%, with 75% being BB or better. Some of the more well-known names are AT&T, Bank of America, Capital One, Dominion Energy, Duke Energy, Goldman Sachs, The Hartford, MetLife and Wells Fargo.

The one thing to watch for is to not pay more than par plus one interest payment for any issues that are currently callable or callable in the near term and focus on yield-to-call in addition to overall yield.

 

[gcgang]

Were these CEFs holding bonds?

Is that what you are looking for?

BIT is a bond fund.

GGN primary objective is hi income, by writing calls on gold and natural resource equities.

I use my tax sheltered accounts for income producing investments, not particularly looking for bonds, especially now.