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Strategies & Market Trends : Young and Older Folk Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: Don01022 who wrote (176)	7/12/2021 6:34:56 PM
From: chowder	Read Replies (1) \| Respond to of 25516

I have seen where some folks have portfolios consisting of 100% CEF's. The downside is that during significant market corrections you can see 70% to 80% drawdowns in various CEF's and most people can't handle that type of volatility. The other negative is the leverage fund managers use. They help the asset on the upside, are a danger on the downside. They add even more volatility and contribute to those huge drawdowns. I would assume you'd need 25-30 CEF's to be properly diversified because you would need to include some that do better in down markets than most funds do. I would think that hedge would be necessary. There are funds that short the market or individual equities and a properly diversified CEF portfolio would probably need to include a few of those. Other than that, I'd need to give it more thought since I haven't considered doing that as of yet.

To: Don01022 who wrote (176)	7/13/2021 7:58:12 AM
From: Rarebird	1 Recommendation Recommended By Graustus Read Replies (1) \| Respond to of 25516

A number of years ago I had a portfolio composed exclusively of BDCs, CEFs and munibonds. I did quite well with them. The key was knowing when to buy and sell when the discount/premium became attractive and compelling. A lot of people don't understand or like BDCs or Muni- bonds. These investments tend to do very well in a decreasing and low volatility environment. BDCs like a strong growth, low volatility setting. These are not blue chip investments and need to be monitored on a daily basis. I don't view them as long term buy and hold investments like a JNJ, for instance. Many of them can have big drawdowns in volatile environments, partly due to leverage and partly due to retail traders/investors getting shaken out. Moreover, part of the problem with these investments are that retail traders go into these vehicles purely for the dividend and get easily shaken out, causing big drawdowns. I found I can accomplish the same, if not better return with less volatility by not investing in these vehicles. They are short to intermediate term trading vehicles, not long term Buy and hold investments. That is my read based on my experience with them and I had a good experience with them. JMHO. PS I am long UTF.