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Strategies & Market Trends : Dividend investing for retirement

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To: golfinggramps who wrote (20160)	6/28/2014 10:57:06 PM
From: Elroy	Read Replies (2) of 34328

CEFL is a great ETN, not sure what the difference is between an exchange traded note (ETN) and an exchange traded fund (ETF). CEFL is a 2x leveraged beast which mirrors the performance of an index (I forget the ticker) which mirrors the performance of 30 high yield funds. So you get 2x leverage, and you get diversification because there are 30 funds in the index. It pays monthly and yields around 18% with the Jan=Apr-Jul-Oct distributions being the big ones (because some of the 30 funds pay quarterly rather than monthly). What could go wrong? For all this leverage and diversification they charge you 0.5% per year. That's seems reasonable. I like CEFL. But it's been doing well (share price going up and paying these big dividends) while the market has been rising. I don't know how it will behave if the general market falls - my guess is you'll still get the yield, but you might lose all the income you get from the yield due to a declining share price. But I'm not sure, many of these closed end funds seem like they might not be too closely correlated with the S&P 500.

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