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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: golfinggramps who wrote (20160)	6/28/2014 10:57:06 PM
From: Elroy	Read Replies (2) \| Respond to 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.

To: golfinggramps who wrote (20160)	6/29/2014 9:30:21 AM
From: Steve Felix	Read Replies (1) \| Respond to of 34328

NRF has given my mother something to talk about for a while now. I've taken taxable accounts at Ameritrade and Vanguard, consolidated them, and keep them updated in a Yahoo Finance portfolio. She keeps it as her home page and doesn't have to log into two different accounts. She has made more money on PRC/MHR, but of stocks she has just held, nothing comes close @ 242%. Her cost basis is 5.15, but after buying her 1400 shares it went under $3. Later sold 400 with a gain. She is currently getting 19% a year on her original investment in dividends. Too bad it is the big exception rather than the rule. I'm sure there are people here who own ETFs. I would rather own individual stocks, but do own a CEF in my IRA, UTG. Originally bought in my taxable account at the time of the Japanese nuclear / tsunami problems, I added in my IRA last year when utilities went out of favor for a while. Almost forgot, I also own a PA. municipal bond CEF in my taxable account. I can see ETFs as a great place for those that don't want to, or can't take the time with individual stocks, or those that want to work with part of their funds and set some other money aside in the market by itself. Everything has a cost. ETF costs are minimal.