How to Buy Yields up to 12% for Pennies on the Dollar

As contrarians, we search for income stocks that vanilla investors hate. Today there are not many dividend deals left. No surprise, with the market levitating since last October. But! When we expand our search to CEFland, we do find a few closed-end funds (CEFs) left at the bottom of the bargain bin. Today we’ll discuss five that pay between 5.7% and 11.7% and trade at discounts between 12% and 18%. In other words, these five CEFs trade for 82 to 88 cents on the dollar. Let’s explore whether each dividend is “cheap for a reason.” General American Investors (GAM) Distribution Rate: 5.7% Discount to NAV: 18.4% General American Investors (GAM) is a straightforward large-cap CEF that holds “companies with above-average growth potential.”… Read more