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  • Fidelity Equity Dividend Income: I'd Rather Own A CEF [View article]
    Nuveen also has QQQX, DIAX, and SPXX which are closed-end buy/write indexed option income funds.

    QQQX is indexed to the NASDAQ. DIAX to the Dow 30. And, SPXX is indexed to the S&P 500 just like BXMX. The difference is in the percentage of the portfolio options are written on.

    These funds actually do have a track record as they were all created from mergers of older funds. But, unfortunately without a lot of digging it's hard to see.
    Aug 28, 2015. 01:15 PM | Likes Like |Link to Comment
  • How To Build An Early Retirement, Tax-Free Income Portfolio With Closed-End Funds [View article]
    Regarding CEFs, 1099s, and taxes: The funds will report the distributions to the brokers, who in turn report it to you via the 1099. However, you can expect corrected 1099 forms later in the tax season. Sometimes, corrections to the corrections. Not that it should deter anyone, but don't expect to file until the last week before April 15th. For TY 2013, I even got a corrected form on April 18th, although it was a small change.

    Most of the covered call CEFs do not use leverage. Many of the bond, muni-bond, and preferred stock funds do use leverage. How much leverage varies by fund.

    If you look at the distribution tab on cef connect, you can see how each fund's distribution is divided up between income, LTCG, STCG, and ROC. Unfortunately, it does not show what percentage of the income was qualified. I have done very well with the Eaton Vance funds, EOS, ETV, ETY, EXG, ETW, and ETB. These are all covered call closed end stock funds. There has been very little in the way of non-qualified dividends from any of them. They all pay monthly, which many other funds have started to change to.

    Recently, I spoke to some friends about closed end funds, the yields, and the tax advantages. Although they were polite and didn't use the term, they all but called me a liar......or, failing that, they accused me of investing in something incredibly risky. There is no free lunch, it's true. Covered call funds are constantly capping their upside by selling calls. If the market becomes a raging bull, covered call funds will not keep pace. Always keep in mind why you invested in this type of investment.....income, not capital gains.

    One idea for your portfolio: have something like SPY for capital gains to go along with your income stream. When the market goes on a tear, sell some SPY to generate reinvestment cash. Bonds, preferreds, utilities, MLPs and so forth are not always correlated with the S&P 500. There may be bargains available. OTOH, when the S&P 500 is down, it may be time to buy more SPY from the dividends generated from the income funds.
    Aug 10, 2015. 11:01 PM | 3 Likes Like |Link to Comment
  • Prospect Capital: Reconciling Different Points Of View [View article]
    Waiting for PSEC management to "unlock value" for you, the shareholder, is like 'waiting for Godot'. If and when it comes, it will be of dubious value. Meanwhile, other opportunities pass by.
    Jul 21, 2015. 05:57 PM | 3 Likes Like |Link to Comment
  • Should You Buy Prospect Capital Corporation? COO Grier Eliasek Gives Some Very Interesting Answers [View article]
    craig, I believe you have unlocked the value of the current carrot being dangled before investors eyes. :)
    Jul 19, 2015. 03:49 PM | Likes Like |Link to Comment
  • Should You Buy Prospect Capital Corporation? COO Grier Eliasek Gives Some Very Interesting Answers [View article]
    gm, I don't think anyone is faulting the PSEC management for their ability to grow the business. They have grown the business substantially. They have worked hard and, perhaps they should be commended for doing a wonderful job. They have greatly increased AUM and have been rewarded. If, by doing all of this the shareholders would have seen rising dividends and a rising stock price, I don't think there would be any furor over the fees. However, there's the rub. The dividends have not risen, but have suffered dramatic cuts twice. Every time management makes a move it always benefits management....sometimes it even benefits the shareholders. The problem is that it appears that the benefit to shareholders is an afterthought or an accident, not the foremost reason for the move. But, it always benefits management....always.

    PSEC management manages its shareholders with a carrot and stick philosophy. The deceptive lure of better things to come just around the corner for the shareholder is put forth, while management lines its pockets every chance it gets. The game has gotten old. The shareholders are now aware of how the game has been played and they aren't happy. Management is still desperately trying to play the game, but the shareholders aren't cooperating. Management needs to get off their collective high horse, lose a little arrogance, do what is right for the shareholders and the business for a change. Will that happen? Is current management capable of doing that? I have my doubts.

    The beat goes on.
    Jul 15, 2015. 09:27 PM | 8 Likes Like |Link to Comment
  • Zweig Fund - Solid Equity Fund Available At A Discount [View article]
    I first bought ZF back in the 2009/2010 time frame. I added to my position over time during price dips. It sits over in the quiet corner of the portfolio where it gradually increases in price and spits out dividends every quarter. I've made about 10% in capital gains (over and above total purchase price), more if you consider cost basis which has dropped due to occasional ROC. In addition, the total dividends received equates to roughly 33% of purchase price.

    It's kind of a 'no muss, no fuss, and no drama' type of investment. Small wonder that it doesn't get much press here on SA. :)
    Jul 6, 2015. 10:33 PM | Likes Like |Link to Comment
  • Prospect Capital: Heads Managers Win, Tails Managers Win [View article]
    RG, you have a much greater faith in current PSEC management than I have.
    Jun 18, 2015. 01:52 PM | 1 Like Like |Link to Comment
  • Prospect Capital: Heads Managers Win, Tails Managers Win [View article]
    RG.....ask yourself this: with all of the growth of assets under management, has the individual shareholder benefited? Have the dividends risen? How about the share price? Faith and trust in management?

    Other than as a trading vehicle, PSEC has not benefited the shareholder as it should have. But, management.....that's another story.

    Actually, the best thing would be if we (retail investors) could invest in the PSEC management company. Then (and only then) would shareholder's and management's interest be in sync.

    But, wait.....that's sort of like an internally managed BDC....hmmmm.

    Jun 17, 2015. 11:53 PM | 4 Likes Like |Link to Comment
  • Prospect Capital - Lies, Distortions And The Truth [View article]
    PSEC has become a battleground matter which side of the fence you are on, articles flow forth on all manner of opinion. As a retired individual seeking consistent income, I owned a good bit of PSEC, but have recently sold. The reasoning came down to this: if I did not already have it in my portfolio, would I initiate a position? The answer for me was 'no'.....or as they say here in NC..'hail no'. The other half of the reasoning was that there are plenty of other income producing securities that don't have falling prices and questionable management. They also don't seem to generate a plethora of articles attacking or defending the company and its management, basically because there is no need.

    While reading PSEC articles here on SA is entertaining and somewhat enlightening, that is not a good reason to invest in it. Prospect Capital may very well get things turned around and the price and dividend will's just that I don't give current management a snowball's chance in Hades of accomplishing that task.

    Jun 10, 2015. 07:21 PM | 5 Likes Like |Link to Comment
  • BlackRock Build America Bond Trust announces monthly distribution of $0.1318 [View news story]
    Why would you sell now? Bonds and bond funds are held for income, not capital gains. They are now bargain priced so that you can get more yield for your money.
    It may not be time to back up the truck, but it's not bad.
    Jun 10, 2015. 05:33 PM | Likes Like |Link to Comment
  • The War On Cash And How To Play It [View article]
    Crime today is less about cash and more about credit card numbers and id's. How does cashless improve that?

    I've done taxes for six years. I was really surprised at the number of people who live paycheck to paycheck and do not have credit cards or bank accounts because of the fees or because of previous indebtedness. Before doing taxes, I was in the corporate world where pay was direct deposit only. I would not have believed or understood the large number of cash-only citizens.

    Is this cashless society going to apply to children and teenagers as well? What is the tooth fairy going to leave under the pillow?
    May 11, 2015. 11:15 AM | 14 Likes Like |Link to Comment
  • A High Income, Balanced CEF Portfolio With Reasonable Risk [View article]
    Mad Stacks, never argue with person whose opinion is always correct. :)
    Apr 27, 2015. 11:05 AM | 1 Like Like |Link to Comment
  • Comparing 2 Monthly Income Closed End Funds [View article]
    In general, I am in full agreement with the author. However, EOS is also pretty good in a taxable account as well. Last year, almost all distributions were a combination of qualified dividends and long term capital gains. There was a fragment of non-qualified dividends as well. But, not much.
    Apr 7, 2015. 03:43 PM | 3 Likes Like |Link to Comment
  • Beware Of Convertible Bond Funds [View article]
    The current NAV for NCV is still above where it was at the end of 2011/beginning of 2012 when it reversed course and climbed higher. So, is its current NAV a concern.....yes. But, on the other hand it paid the same distribution right through that low point in 2011, and continues to pay now. Check out the distribution history of NCV on It's really boring. Month after month it pays the same amount.....through up markets and down.

    The thing with investing in any security is that in order to get it at a cheap price, there needs to be a reason for market rejection. You, the investor, need to see value even when the market does not. With the current fearful interest rate environment (omg, the Fed's gonna raise the rate), any bond fund is going to experience price/NAV difficulties. But remember, bonds still pay their coupon rate regardless of current rates. All bonds mature. As they mature, their NAV rises as they approach redemption date. Once redeemed, the fund manager can reinvest in the now higher interest rate environment.....should that come to pass. Coupon rate, maturity, and quality ratings do not change just because the Fed raises the interest rate.

    I believe what we are seeing in bonds is some pricing in of a Fed rate raise. If and When the Fed does raise rates, there will be further drops. I'm keeping some dry powder ready because it will be time to sort through the bargain rack.
    Apr 7, 2015. 01:31 PM | 3 Likes Like |Link to Comment
  • Comparing 2 Monthly Income Closed End Funds [View article]
    Eaton Vance has an excellent article on their website which explains ROC in detail. You might want to read it to get a better understanding of this little understood concept.
    Apr 7, 2015. 12:16 PM | 4 Likes Like |Link to Comment