I have a business school education in Finance and immediately after the university worked for a NYSE firm in Beverly Hills, California . Experience has made me much more of a technically based "buy the dips" and "sell the rips" type of investor/trader rather than relying purely on fundamental analysis. I get emails from individuals when I post at SA on just what I do to make my returns. In essence, I use a number of oversold/overbought indicators to sell greed and buy fear. Investments generally return to their intrinsic value and CEFs are a great way to take advantage of oversold and overbought conditions in different market sectors. Of course the other benefit is in a sideways market CEFs generally provide a nice comparatively high steady return, often for months. My primary influence comes from following the S & P. When it is oversold or overbought I am on high alert. I may trade the SPXL long or short to make profits on these 'rips' to put into CEFs, occasionally using margin, When I buy on margin on a dip I am first buying the CEFs and then then SPXL. I use protective stops at all times, even on the CEF portfolios. As my target pricing becomes overbought I am first selling off the SPXL to totally reduce margin exposure. I do not keep ultra tight stops with the CEFs as I am getting a nice return while waiting for them to get to also reach a target oversold pricing, then I may tighten stops. Thus, a sideways market doesn't bother me when I've bought a dip and, as mentioned, is one of the reasons I love CEFs. My priorities are protecting capital with stop loss orders, then just trying to always be profitable. My 3rd priority is making tax advantaged money. As far as which particular CEFs I buy "on the dips", this varies. I find them in articles at SA, and by using CEF Connect where I'm looking for deeply discounted CEFs with good volume in various sectors. These are often in 'out of favor' categories. I always have a watch list ready for a 'buy the dips' opportunity in my taxable income portfolio and for my IRA portfolio. In general I don't like more than 4 to 6 positions in a portfolio. In the IRA portfolio I may take a full position in CEFL when I am buying a S&P dip and may hold it for several months in a bull or sideways market. I like CEFL so much since it is very correlated to the S&P and thus a very predictable investment. This is not a long term holding but a trading vehicle. Again, I sell it when it shows up as overbought. I have no problem holding cash in any of my portfolios. You really have a whole different perspective when you are generally always holding profitable positions, which is a true peace of mind benefit to this methodology. Although I always use stop loss orders for holdings when the S & P is oversold, I really don't worry about just selling and booking a profit when the market is showing a really oversold indication, rather than trying to squeeze everything out of a position (greed). I scale in and out of almost all positions trying to start with only 1/4th of a full position. This 'awakening' about trading the markets has allowed me to have other interests which include high end fitness, attending classic rock music concerts around the globe, and luxury level travel to over 75 countries. After all, someone has to support the classic rock and roll legends in the luxurious lifestyles they've become accustomed to! ... :-) ... I also enjoy some Jim Beam Signature Craft Bourbon Whiskey 12 YO on occasion. Good Luck To All! OH ... :-) ... how does this methodology work out (what I use is a bit more complicated than the above with different overbought/oversold indicators for leveraged CEFs, option CEFS, commodity CEFs, etc.) ... my return on capital was 34% in 2014, 31% in 2015, and looks to be even better in 2016 with the increased volatility expected. Everyone's tax situation is different so govern yourself accordingly.
Pilot at a large airline. Recent convert to DGI investing. Will have a fixed pension available after age 60 and need to supplement via an IRA. Considering converting some monies to Roth IRA to escape RMD's and also earmark for long term care if necessary. Current age 59.
I work many hours, am 50, raising 2 kids, spend much time learning about dividend stocks. I originally had half of our money in an annuity which had lackluster results. After I learned that the salesperson was only interested in getting a large load(commission), we transferred the money into a fee based service which invested our money in mutual funds. When I learned that the 1% fee was being subtracted from our earnings, and that there were expense ratios being charged by the mutual funds, I again transferred our money into an IRA. Ever since then, I have been investing our money myself in individual stocks that pay dividends. I have DGI stocks, E-REITs, M-REITs, and BDCs. All of my investing success is due to the books I've read, the articles posted to SA, as well as many great posted comments from other investors. I started investing in stocks in 2013 so I am still learning. Thankfully SA was created, because the information on this site is extremely valuable.
I am extremely thankful for those who write the articles on SA. But just as important, are the many knowledgeable people who post comments to share their knowledge and insights. That is where I learn the most. When people have added to the value of an article by posting intelligent point of views that differ from my own, I start to really think from a different place than where I started from.