Blog

  • Publishing Update

    We generally aim to publish a new Closed-End Fund recommendation early in the month.  However, given the market volatility being caused by the political turmoil in Washington we will delay issuing a new recommendation until the market sentiment is more settled.  We want to stress that we are not market timers.  There are certain times and circumstances (for example, just before a key economic indicator is reported) when the astute investor stands aside.

    As a sidelight, the current situation illustrates why the Closed-End Fund Letter recommendations are sold on a single issue basis.  We have the freedom to only issue a Closed-End Fund recommendation on the merits of the issue, not because of a publishing deadline.

    The September recommendation is still available for purchase.  As we noted, given this funds stellar pedigree it should be considered a core holding.

  • September Recommendation is Available

    Summer is almost over and that means it is time for football–lots of football–and to put “look for the leaf rake” on the to-do list.

    It is also time for the September 2013 Closed-End Fund Recommendation.

    Just click on Free Subscription/Order to get started.

  • Closed-End Funds in the news . . .

    Richard Lehmann in a recent Forbes magazine (June 10, 2013) article entitled: “Income in a Zero Rate Environment” noted the following:

    “While a profusion of exchange-traded funds has popped up to serve narrow niches of all types of markets, closed-end funds have been doing it a lot longer. They offer income investors high yields and diversification with active management and without the mindless tax consequences of open-end funds.”

    A well deserved accolade from a respected analyst.

  • TAPER. The only word that really matters . . .

    Currently the bond, equity, currency and commodity markets are fixated on one word: TAPER. Simply said, in this case, the verb refers to the anticipation of if, when, and by how much the Federal Reserve could (will, or may ?) reduce its existing bond repurchase program.

    Expect, in the short term:  (1) considerable conjecture and rumor mongering, and (2) market volatility.

    Do not be fooled, the global economy is weak and there are no clear signs of a recovery. Bernanke is managing expectations. My numbers say that this time next year (not counting an extraordinary geo-politoco-economic event) the Fed will be still be buying.  The Fed will never do anything that it perceives will slow the nascent economic recovery.

  • HEADS UP. Municipal Bond Debacle in Detroit dead ahead . . .

    The dismal financial future of Detroit, Michigan is not breaking news to anyone who has followed the municipal market. In a word, since the mid 80′s Detroit’s economic future was always: bleak.

    But just how bleak is staggering. In recent reports, indications are that creditors-mostly bondholders–will be asked to accept 10 cents, or less, on the dollar for their bond holdings.

    There are several lessons here regarding the credibility of the municipal market–none of which are very encouraging. In short, stay away!

  • HEADS UP. Bernanke Gives Signals–sort of. . .

    Federal Reserve chairman Ben Bernanke told congress that the Fed might reduce the monthly $85 billion of bond purchases sometime soon–but with no definitive timetable or other details.  This signals that there are internal discussions on where the economy is headed (up) and that, as importantly, there is a desire to temper the bond and equity markets potential negative reaction if a Fed cutback in bond purchases is announced and is misinterpreted.

    Two key issues:  When and How Much.  Calmer minds agree that when is several months away–four or more seems reasonable at this time, and how much at least initially will be minimal.

    All in All:  The Fed is always vague on the future, but Ben’s latest and some of the follow-ups indicate that if the economy is improving the pace is tepid–at best.  So the only clear guidance is to avoid new long-term fixed-income investments.