No dumb questions. No "supposed to be" -- every situation is different.I just read about this $240k- 1k/mo some where,
I did not know it is supposed to be all fixed income.
A dumb question, sorry
Thanks
Curious if you are considering this as a retirement strategy? How would it fit in with other sources of income?Curious how the $240k needs to be invested ?
In Stocks & Bonds ?
Asset Allocation ??
Any thoughts …,
How you going to get that COcheesehead I'd like to knowI can get you $1500/month, tax free.
Yes but you forgot the most important part how much money is needed in each fund to get that tax free money of $1500?Any combination of NMCO, VKI, NAD, NZF, NVG. I own them all in a taxable account.
You didn’t even look at these because you would have known they all yield pretty close +/- 7.5%.Yes but you forgot the most important part how much money is needed in each fund to get that tax free money of $1500?
Yes I looked at them they remind me of penny stocks which can make money or loose it all as they all are under $15You didn’t even look at these because you would have known they all yield pretty close +/- 7.5%.
Tell me you don’t understand closed end funds without telling me you don’t understand closed end funds. The NAV is inconsequential. The dividend drives the return and the fund’s ability to generate that dividend. You are confusing financial instruments. Fixed income vs equity. Smart’n up.Yes I looked at them they remind me of penny stocks which can make money or loose it all as they all are under $15
I'm looking at the first one, and it has losses 3 out of the last five years totaling a 40% loss. If you are getting a 7.5% yield, do you just ignore the loss of principle and hope it comes back? It seems that it is not a conservative investment, but has the volatility of the stock market. I do not own any of the closed end funds, but find them interesting.You didn’t even look at these because you would have known they all yield pretty close +/- 7.5%.
Closed end funds are bets on junk and low rated financial instruments. They pay a high dividend because they are high risk. They can sell at a discount to NAV and are interest rate sensitive. People buy them for the income stream. If you sell, you can lose principal. Holding a basket of these reduces your risk (somewhat).I don't claim to even understand these issues, but don't you need to track the value of the underlying investment as well as the "income" (dividend)? You might make 7.5% on your initial investment but if the underlying investment value drops to half what you paid, I don't see how that is a win.
That's why I'm not a fan of dividend harvesting or even paying a lot of attention to dividends. I think increasing dividends might indicate a healthy stock some times. But basing my income on dividends just isn't my thing - though I know some folks here do it that way. I'm just asking questions 'cause I really don't know the answers. Not being critical.
And I was just asking questions about them never said I knew anything about them and just curious what they were, but I think I'll stay with my Stocks and ETF's and I must be somewhat smart I'm here LOLTell me you don’t understand closed end funds without telling me you don’t understand closed end funds. The NAV is inconsequential. The dividend drives the return and the fund’s ability to generate that dividend. You are confusing financial instruments. Fixed income vs equity. Smart’n up.
Unrated bonds mac well be junk rated if they were sent for rating. I understand CEF's and I think they are great for income, but come with more risks because of the high yields.I started investing in the closed end muni funds when rates flatten out so I have not experienced the NAV erosion. I also trade between the five I hold in order to take advantage of market inefficiencies. They are awesome income generators, but they should be held just for that, income. They do not all contain junk as alluded to by another poster. The higher income comes from the use of leverage. They may contain unrated bonds, but the managers use in house research to buy which is many levels higher than say Moodys. If you don’t understand them, don’t buy them, but also don’t post erroneous information or compare them to penny stocks of all things.
I also invest in taxable closed end funds. They have been some of my best performers YTD. PDO, PDI. They don’t all sell at discounts as posted earlier. Some sell at premiums due to the dividend. Do your research and post on your experience or facts. To post other wise is a disservice to the community.