“The thing I want to emphasize is that nobody knows,” the beleaguered Fed chair sighed at last week’s presser, when asked about the effects of the latest flare-up in the Middle East.

It’s easy to see why. The poor man is in a jam not of his making. Futures markets see fewer and fewer rate cuts on the horizon. And more forecasts see a bounce in inflation—maybe even stagflation.

To be sure, no one at the Fed (or anywhere else) had $100 oil on their bingo card in January!

The mainstream crowd, of course, is just as shocked as the experts at that development. Their fear has wiped out the premium on the tax-free 7.6% dividend we’ll talk about below. That, in turn, sets up an opening for us who take the long view—and clearly see what everyone else has missed: the deflationary event that’s quietly unfolding across the US economy.

If you’ve been reading my columns lately, you likely know where I’m headed next.

AI > Surging Oil

You might recall that Powell said something else in last week’s press conference: that over the last six months, there has been basically zero job creation in the private sector.

That’s pretty sobering. And I’ve got a personal story that I think sheds light on it. I’ll start with something you may not know about me: Dividends aren’t my only passion. I also run a software startup.

And a few weeks back, I had to end the contract of one of my most valued employees.

He’d been with me for eight years, and he’s a smart guy who delivered high-value online marketing work week after week.

I was trying to make it work. But I came to the realization that AI could do his job. Not “kind of” do it—actually do it, faster and better. With better results.

While the rise of the machines is exciting for entrepreneurs like me, it’s also challenging for anyone with a heart. But the numbers don’t lie: Over a three-year period, I’ve been able to reduce my company’s expenses by 70%; I’ve cut headcount by five-sixths; and—get this!—I’ve grown our revenue.

This is the power of deploying AI tools. And it’s happening across the economy (and increasingly beyond tech): Headcounts are flat, and profits are growing.

That’s where the mainstream crowd is losing the plot: AI is slashing costs, capping wages—and quietly grinding down inflation. And that’s why I remain bullish on bonds.

Which brings me back to that 7.6% tax-free dividend I mentioned a second ago.

Oil Spike Clips This (Tax-Free) 7.6% Payer

Bond prices, as you likely know, move inversely to rates. And with oil soaring, Treasury yields are also rising, driving bond prices lower. That’s set up a timely entry point on the 7.6%-paying Nuveen Municipal Credit Income Fund (NZF). And I do mean timely: As soon as investors catch on to what AI means for rates, the window on this smartly run municipal-bond fund will slam shut.

As you can see below, since the start of the Iran war, this steady payer’s share price is now below where it was at the start of the year:

NZF Falls to December Levels …

That, in turn, has erased the 1.6% premium the fund sported back in mid-February, sending it to just a hair below par as I write this:

… And Sends Its Premium Packing

That may not seem like much of a move, but it’s a stark shift for a steady asset class like “munis.”

Now let’s talk dividends, because another thing most people underestimate with munis is just how much these bonds’ tax-free status really means in dollars and cents. And of course, that tax-free benefit gets sweeter the higher up the tax-bracket ladder you go.

At the top? NZF’s 7.6% yield flips to a gaudy 11.2% for you, with your federal tax savings:

Source: Bankrate.com

The fund’s payout history also tells us something important. As you can see below, NZF did reduce the payout in the 2022 mess. But it quickly reversed course as rate cuts kicked in:

Source: Income Calendar

That pattern also bodes well for a buy now, because it suggests today’s elevated inflation expectations—although nowhere near where they were in ’22—open the door to rising payouts as those expectations fall (see AI above!).

In other words, today’s inflation worries are the fuel for tomorrow’s payout growth.

No matter what happens, there’s no real “bad” time to buy this one from a dividend standpoint: Even if you’d bought NZF when rates hit bottom in 2021, you’d still be reaping higher payouts now than you did back then.

“As Far From Middle East Disruption as You Can Get”

Muni bonds are issued by state and local governments to fund infrastructure projects, which are, of course, about as far from Middle East disruption as you can get. That gives them extra stability, as you’d expect.

Further, we can trust Nuveen to navigate the muni-bond space for us. They’ve been around since 1898, and their performance in rate-sensitive spaces, like bonds, real estate and infrastructure, is proven.

That’s one more reason to pick up NZF now. Then we can simply sit back and start collecting its tax-free income while we wait for other investors to wake up to what AI really means for inflation—and bond prices.

This 11% Dividend Is My “Go On Offense” AI Play

While NZF is a top pick for tax-free income as AI cuts costs, I’ve got another bond fund I’ve picked to go hand in hand with NZF—and add strong upside, too.

It trades at a bigger discount and holds top corporate bonds, which are primed for gains as the real effects of AI dawn on the crowd.

But this overlooked (for now) fund is more than a growth story—it also sports an 11% dividend that rolls our way monthly. It’s one of the highest yielders in my portfolio today, and it’s run by one of the top minds in the bond business.

Pair it with NZF and you’ve got a perfect “one-two punch” for income and growth. The complete package!

But as is the case with NZF, I don’t expect this 11% payer to remain a bargain for long. Click here and I’ll introduce you to it and give you a free Special Report revealing its name and ticker.

It’s easy to see why some investors may be thinking along those lines. And it’s something I’ve been giving a lot of thought to lately. But here’s the twist: There’s another year I think 2026 resembles a lot more than 2008.

That would be 2023.

If you remember, that year was a buying opportunity in stocks—and to pick up the closed-end fund (CEF) we’re going to discuss today. In fact, both 2008 and 2023 ultimately turned into strong setups for this 7.7%-paying fund.

And today’s private-credit woes open the door to another strong run from here.

2008, of course, needs no introduction. Back then, a housing bubble inflated by subprime mortgages took down the global economy. (If you’re too young to remember, I’d recommend watching The Big Short.) The S&P 500 fell more than 50% from its 2007 peak till it reached the trough in early March 2009. Stocks didn’t see that 2007 high again until mid-2012.

2009 Was the Start of a Long Grind Back …

Then there’s the other (and in my view more likely) possibility that if we do see a disruption this year, it’ll look more like 2023, a time we can all remember.

Early that year, the failure of Silicon Valley Bank and some other regional lenders brought back dark memories of what had happened 15 years earlier. But if we look at what’s happened since, it quickly becomes clear that the 2023 dip was a fantastic buying opportunity:

… While 2023 Signaled the Start of a Big Market Surge

While 2008 was a year that brought the global economy to its knees, 2023 ended up being a strong year for stocks, returning 26.2% from beginning to end. And since the trough of the March 2023 selloff, the S&P 500 has gained a solid 80%, as of this writing.

Still, I’m sure you recall the fear in the air at the time. But we saw the selloff for what it was: a chance to buy at a bargain. In a March 2023 article, I wrote that “the selloff has resulted in deeper CEF discounts—and some nice buying opportunities in our CEF Insider portfolio.”

And in the March 2023 issue of CEF Insider, we made a contrarian move, picking up the finance-focused John Hancock Financial Opportunities Fund (BTO). By the time we sold a little over a year later, in July 2024, BTO had delivered a tidy 24.1% total return. (We’ve since re-added the fund to our portfolio.)

The fund also yielded 8.4% when we bought and has been steadily growing the payout for the last 15 years (the fund yields 7.7% today, due to the gain in its share price):

BTO’s High, and Growing, Payout

And now, thanks to this year’s volatility, we have an opportunity to buy BTO at a bargain:

BTO Flips From a Premium to a Discount

In fact, over the last decade, BTO has had a 3.7% average premium to its net asset value, making this discount to net asset value (NAV) bigger than it looks. Why is this deal in front of us? A hint is in the fund’s portfolio:

Source: John Hancock

As you can see, BTO is focused on regional banks. Old National Bancorp (ONB), Pinnacle Financial Partners (PNFP), Popular (BPOP) and Citizens Financial Group (CFG) are all regional banks that have thrived over the last few years.

That’s driven BTO to strong returns over the long haul, too: 10.7% annualized over the last decade, to be exact. Put another way, every $100,000 invested in BTO in 2016 would be worth around $319,000 as of this writing.

And even following 2008, BTO (shown in green below) performed well:

Source: John Hancock

In the decade following the Great Recession, BTO turned $100,000 into $267,478. That’s a solid positive return, showing that the fund can still deliver profits, even in the wake of the worst financial crisis in a generation.

My Take? This Private-Credit Fiasco Is More Like 2023 Than 2008

Which brings us back to private credit, and whether stocks are on the verge of a pullback due to poor risk management in this largely opaque market.

My take? Most likely, this situation is a tempest in a teapot. Consider first of all the wider context: The private-credit market is about one-sixth the size of the total corporate credit market, and the worst estimates point to private credit generally being marked to market at a 20% discount to current levels.

Second, a diversified fund like BTO is likely to hold up well even in the worst-case scenario: The fund holds 186 assets across a range of banks, insurers and other financial institutions.

A rough estimate suggests that a private-credit pullback could translate into only about a 3.3% hit to BTO’s NAV. I see that as largely priced in, due to the recent widening of BTO’s discount and the fact that this fund has generally traded around a 3.7% premium.

These are the two numbers to key in on here, as they suggest BTO—which has performed strongly over the long haul and the short—is ripe for buying, no matter how this all plays out.

I’m Issuing an Urgent Buy Call on These Four 9.2% Payers, Too

It’s not just BTO—the current market turbulence has widened the discounts on plenty of other CEFs, too. And we’re doubling down, not just on BTO but on 4 other funds yielding a rich 9.2% between them.

I call them “All-Star” funds for the strong long-term runs they’ve put up, not to mention those rich 9.2% payouts, two of which come our way monthly.

There’s no time to waste if you want to grab these 4 funds before their deep discounts slam shut. Click here and I’ll tell you more about them and give you a free Special Report revealing their names and tickers.

But, why? The best plays here are geopolitical-proof. They print money regardless of what’s going on in the world.

So this is a good time to check in on healthcare. In a moment we’ll review five dividends between 6.0% and, get this, 14.1%!

First, though, let’s unpack the reasons for the recent pullback. Back in August, I flagged how Medicaid cuts, health research funding, pharmaceutical tariffs and a cocktail of other headwinds had kept the sector pinned down for months. However these resilient companies have a habit of getting back up—and sure enough, healthcare went on a new tear, returning about 25% through late February.

Then Healthcare Got Caught Up in the Market’s Recent Turmoil

Here are five healthcare stocks handing us up to 9-times the sector average yield. Are these payouts worth purchasing? Let’s look under the hood and analyze the fundamentals.

Pfizer (PFE)
Dividend Yield: 6.5%

Pfizer (PFE) was for years one of healthcare’s most dependable blue chips, built on successful blockbuster brands like Lipitor, Viagra and Zoloft. But near the end of 2021, the bottom started to fall out of the stock. Today, shares are worth only half of what they were then.

The biggest risk staring Pfizer in the face is a common one in pharmaceuticals: the patent cliff. Eliquis, Ibrance, Xtandi, Prevnar 13 and other drugs that combined deliver about $17 billion of Pfizer’s annual revenue are scheduled to go over the patent cliff between now and 2030. For context, PFE’s revenue guidance for 2026 is $61 billion at the midpoint. The company has also been held back by changes to Medicare’s Part D prescription-drug coverage and declining COVID drug sales.

But Maybe, Just Maybe, Pfizer Is Turning Things Around

Pfizer is looking toward GLP-1 weight-loss drugs to help counterbalance its patent-cliff expirations. It has made several additions to its GLP-1 pipeline of late, including a $7 billion acquisition of Metsera, a collaboration with China’s YaoPharma, and a rights deal worth up to $495 million with China’s Sciwind Biosciences.

The stock technically has been in bargain territory for years, as I pointed out in both 2024 and 2025; it remains that way, at about 9 times 2026 earnings estimates and a yield that’s still north of 6%. What’s been missing are positive catalysts; its GLP-1 moves are a start.

Alexandria Real Estate Equities (ARE)
Dividend Yield: 6.0%

Pfizer is a rare 6%-plus yield out of pure-play healthcare stocks. Usually, for that level of income, we need to seek out related real estate investment trusts (REITs).

Alexandria Real Estate Equities (ARE), for instance, owns 340 properties representing some 35.9 million rentable square feet of operating properties, as well as another 3.5 million in Class A/A+ properties that are currently undergoing construction. Its properties are leased out to biotechnology, life science, biomedical, pharmaceutical, and other healthcare companies.

However, that means Alexandria is ultimately also an office REIT, and the stock has acted like it. Shares peaked in 2022 and have since crashed by nearly 75% amid a number of headwinds. Rising interest rates hit ARE along with the rest of the sector in 2022 and 2023; the stock was also weighed down by an oversupply in lab space, tightening NIH funding and FDA leadership turnover under the new administration, declining venture capital for startups, among other issues.

I warned in early 2023 that ARE was among several stocks that could cut their dividends. It took a couple of years, but Alexandria’s issues finally came to a head in December 2025, and the REIT announced it would slash its dividend by 45%.

Real Estate Found Its Footing in 2024; Alexandria Didn’t.

Alexandria is making up for at least some of the slack in life sciences demand by leasing out to technology companies. It has also been reducing capital expenditures, as well as its property count, which has shrunk from 391 at the end of 2024 to 340 today.

The company remains cheap, though at about 9 times AFFO estimates for 2026, it’s not the kind of swinging deal we’d hope for out of a company that’s been in perpetual decline. The dividend is much more realistic, at just 55% of AFFO projections—that’s good, but less than what we’d want out of what’s clearly still a fixer-upper.

Healthpeak Properties (DOC)
Dividend Yield: 7.0%

Healthpeak Properties (DOC), like Alexandria, is off significantly since 2022, but its trajectory looks somewhat different—and healthier.

We’d Like to See Better Than This, But It’s Not a Tailspin

But a new development will significantly alter this healthcare REIT.

Healthpeak, as of late February, owned 689 properties representing 50 million square feet and 10,422 units across outpatient medical facilities, laboratories and senior housing. Its tenants included biopharma firms, health systems, physician groups, medical device manufacturers and retirement housing companies, among others.

I use the past tense because the business is about to slim down.

The company recently announced the launch of its initial public offering (IPO) of Janus Living—a pure-play spinoff of its senior housing portfolio. Healthpeak isn’t completely detaching from the business—indeed, it will still own a “substantial” majority share after the IPO, and it will externally manage the company. But it does expose Healthpeak even further to the weak fundamentals of life science real estate. The primary hope there is Healthpeak’s belief that real estate fundamentals there “are at or near an inflection point,” and even then, “a full recovery will take time.”

We’re collecting a 7% yield—now paid monthly, a nice upgrade from last year—with coverage at just a hair above 70% of 2026’s AFFO estimates. And the stock trades at a decent 10 times those expectations. But we’ll want to see the dust settle on the Janus offering, and some genuine signs of life from the life sciences industry, before loading up.

BlackRock Health Sciences Trust (BME)
Distribution Rate: 7.9%

It should be no surprise to regular readers that the fattest sector yields can be found by tapping closed-end funds (CEFs).

BlackRock Health Sciences Trust (BME), for instance, gets us nearly 8% on a portfolio of Big Pharma, biotech and medical devices names.

That last industry has taken a shellacking over the past year, with holdings such as Intuitive Surgical (ISRG), Danaher (DHR) and Boston Scientific (BSX) ceding some of their influence over the portfolio to companies like AbbVie (ABBV) and increasingly AI-powered biotech play Gilead Sciences (GILD). Similar to the broader healthcare index, that exposure has put BME behind pure-play pharma and biotech funds.

But zoom out and this BlackRock fund has outperformed most noteworthy healthcare index funds since it launched more than two decades ago. And in true CEF fashion, we get to buy those holdings at a modest 4% discount to net asset value (NAV)—a hair wider than its long-term average.

The fund uses next to no leverage, nor does it sell covered calls or use other options strategies. Instead, its high yield is the product of disciplined capital gains distributions.

Importantly, though, BlackRock is happy to share the wealth as performance permits. The fund has actually raised its distribution twice over the past five years:

A Monthly Dividend Pointed in the Right Direction

Source: Income Calendar

abrdn Healthcare Investors (HQH)
Distribution Rate: 14.1%

BME doesn’t hold a candle to the sheer yield power of abrdn Healthcare Investors (HQH), which currently throws off north of 14% right now.

The name says “healthcare,” but the portfolio says “biotech.” A little less than 60% of assets are dedicated to biotechnology companies. Pharmaceuticals and healthcare equipment each enjoy double-digit weightings. The rest is splashed around life sciences, managed healthcare and other industries. Importantly, the fund can and does invest a little of its assets in privately held companies—a nice kicker that’s virtually impossible to find in ETFs and mutual funds.

HQH shares a few things in common with BlackRock’s fund. It trades at a nice discount (in fact, it’s even cheaper, at an 8% discount to NAV). And it doesn’t use leverage. Instead, it has a managed distribution policy—but unlike BME, it’s happy to use covered calls to achieve its sky-high rate.

Unfortunately, That Distribution Isn’t as Consistent, And It’s Quarterly

Source: Income Calendar

The catch with covered calls is that they strip away upside potential—and biotechs are famous for their sudden, sharp launches.

My Favorite 11% Dividend Is a Cure for 2026’s Chaos

When HQH’s management sells calls against a biotech portfolio, they’re essentially investing with one hand tied behind their back, handing away gains to generate income.

If I’m taking a swing on a double-digit yield, I’d prefer to let a skilled manager do what he or she does best.

Right now, one of my favorite home-run dividends is a heavily diversified, brilliantly built bond portfolio that yields 11% but is also set up for stock-like gains.

This fund checks off just about every income box I can think of:

• It pays a whopping 11% in annual income!
• It has increased its dividend over time
• It has paid out multiple special dividends
• And it pays its dividends each and every month!

On top of that, Morningstar previously named this fund’s manager a Fixed Income Manager of the Year. He’s been inducted into the Fixed Income Analysts Society Hall of Fame, too.

That’s about as good a resume as we’ll find, and his fund will pay us $1,100 for every $10K we invest.

But the window is closing fast! Premiums on funds like these tend to rise as volatility ticks higher and as investors rotate out of growth stocks and into reliable sources of income like this. I don’t want you to miss your chance. Click here and I’ll introduce you to this incredible 11% payer and give you a free Special Report revealing its name and ticker.

Now, another closed-end fund (CEF) investor is adopting Weinstein’s tactics—and turning them on two of the activist’s own funds. This investor’s goal? Wipe out the discounts to net asset value (NAV, or the value of their underlying portfolios) on these two funds, and in doing so drive their prices higher.

It’s a fascinating story, and one that shows how, in the small world of CEFs, skilled activists sometimes turn their attention to each other.

Let’s back up for a moment.

In case you’ve missed it, Weinstein’s firm, Saba Capital Management, has been in the news because, as I wrote a week ago, they’ve taken a break from CEFs to target private-credit funds. And as we discussed in that article, the criticism of private credit lately has been highlighting the value of our CEFs as a source of high, stable dividends.

Weinstein has rightly been pointing out that private-credit funds are underdelivering and a source of rising risk. His target has been a cluster of funds managed by Blue Owl Capital, which also runs Blue Owl Capital Corporation (OBDC), a business development company (BDC) that leans toward private credit.

If we compare Blue Owl’s performance (in blue below) with index funds tracking the S&P 500 (in purple) and the BDC market—in the form of the VanEck BDC Income ETF (BIZD), in orange—you can see what Weinstein means:

Blue Owl Lags BDCs, Stocks

Saba’s Approach

The strategy Saba is taking toward these funds fits the culture I’ve observed from talking to people who work for the firm: adversarial, tough and results-driven. But it’s also worth noting that Saba’s own funds have underperformed, opening the door for other investors to take aim at them.

Saba manages two CEFs, both of which trade at discounts far bigger than the 7.7% average discount among all CEFs tracked by my CEF Insider service. Let’s start with the 15.7%-yielding Saba Capital Income & Opportunities Fund (BRW), in blue below:

BRW Falls Behind …

Here we see that, since Saba took over BRW, the fund (in blue) has outperformed the BDC benchmark VanEck BDC Income ETF (BIZD), in orange. But it’s still delivered less than half of the S&P 500’s return (in purple). This is why BRW trades at a 15.5% discount as of this writing, and that discount has been widening.

… And Its Discount Gets Wider

It’s a similar story at the 8.6%-yielding Saba Capital Income & Opportunities Fund II (SABA):

SABA Also Lags …

For a while, SABA (in blue above) was outrunning the S&P 500, but its aggressive investments in crypto (Grayscale Ethereum Classic Trust is its second-largest holding as of this writing) mean its short-term gains have been fizzling lately.

We should also note that about 20% of SABA was in private funds as of the end of October 2025, and the fund warns shareholders that they may be at risk of owning private credit if they own SABA.

Source: SEC

That partly explains why SABA’s discount has also widened in recent months:

… and Sees Its Discount Drop

To be fair, comparing either of these funds to the S&P 500 and BIZD is a little “apples to oranges,” but for investors looking for returns and dividends, that may not matter.

The Gabelli Response

Here’s where our “other” activist comes in.

That would be GAMCO Investors, run by well-known value investor Mario Gabelli. GAMCO is what I’d call a more traditional CEF firm, and it’s spotted an opportunity to target Saba’s funds in a similar way that Saba has targeted CEFs in the past.

And one of Gabelli’s funds stands out now, for the opposite reason as SABA and BRW do: This one trades at a massive premium to NAV:

Gabelli Utility Fund Trades for Nearly 2X Its Portfolio Value

Here we see the 77% premium on the Gabelli Utility Trust (GUT). The fund, which holds major US utility stocks like NextEra Energy (NEE), Duke Energy (DUK) and ONEOK (OKE), has surged to that big premium in recent years.

That’s great for anyone who bought in back in the mid-2010s, when GUT traded at much smaller premiums (in the 7% to 10% range), as they can now sell at this premium.

In short, GAMCO has done for GUT what Saba aims to do for other funds: boost their valuations, thereby delivering strong returns for investors.

GAMCO aims to do this for SABA and BRW by nominating David Schachter, vice-president of GUT, to the boards of both funds. In other words, Gabelli is taking a page out of Saba’s activist playbook to influence the performance of Saba’s own CEFs.

Will it work? Tough to say, but it’s not impossible, especially if Schachter brings Gabelli’s value-investing approach to Saba (which could, among other things, curtail some of Saba’s crypto and private-credit investments).

That, of course, would be good for shareholders in the long term (again, if Schachter’s appointment comes to pass). But now is not the time to pounce in hopes that this happens, since it’s still a long time until this story plays out. No matter what transpires, at least between now and the time the nomination is decided, both BRW and SABA continue to entail above-average risk.

My 5 Top Monthly Dividend CEFs Pay Out 60 Times a Year (and Yield 9.3%, Too)

It’s worth restating: BRW and SABA could be smart buys in the coming months. But they’re simply too volatile for us to touch now.

And while the CEF world is small, it’s not that small.

There are still plenty of CEFs out there paying big dividends and sporting wide discounts. And plenty go one step further and pay dividends monthly, too.

I’ve assembled 5 CEFs that meet both those benchmarks and kick out a rich 9.3% average dividend between them. Think about that for a moment: Own all 5 of these monthly payers and you’re getting paid around 5 times a month.

That’s a total of 60 dividend payouts a year! 

I’ve put all 5 of these reliable monthly payers together in a “mini-portfolio” all their own. I’m urging income investors to buy all 5 of them now.

Now is the time to buy them and start your 60 “paycheck” income stream. Click here and I’ll tell you more about these 5 stout monthly income plays. I’ll also give you a free report revealing their names, tickers and my full analysis of each one.

Let’s pick on the widely followed and owned iShares iBoxx High Yield Corporate Bond ETF (HYG) as an example. It has attracted over $15 billion in assets because:

1. It’s convenient and as easy to buy as a stock.
2. It’s diversified (for better or worse, as we’ll see shortly) with 1,327 individual holdings.
3. It pays well, at nearly 6% today.

The accessibility of funds like HYG appears cute and comfortable enough. But remember, ETFs are marketing products. They are designed to attract capital—not necessarily earn you a return on capital.

Big money is spent on television, print and online advertisements. Less cash and thought are put into the actual income strategies that ETFs employ–and their lagging returns reflect it.

Let’s pick on the four biggest flaws most bond ETFs suffer from. Then, I’ll share a superior and just as easy way to buy bonds.

ETF Fatal Flaw #1: Underperformance

HYG is run by a computer. PIMCO Dynamic Income Opportunities Fund (PDI), on the other hand, is run by a bond-buying genius.

Dan “Beast” Ivascyn leads a fixed-income dream team at PIMCO. When deals become available, he receives the first phone call. PIMCO closed-end funds (CEFs) like PDI directly benefit from Dan’s expertise and connections.

So, it’s no surprise PDI has beaten the pants off HYG since PIMCO launched the fund in May 2012:

ETF Fatal Flaw #2: Wimpy Dividends

HYG pays 6%. That’s great–for vanilla investors, but pedestrian for us picky contrarians.

PDI yields 15.1% as I write.

Invest $100K in HYG, collect $6,000 per year in payouts.

But plunk $100K in PDI and bank $15,100 in passive income. More than double HYG’s dividends.

ETF Fatal Flaw #3: Ranking the Worst First

“Passive” methods—building portfolios based on rules—don’t work well in the land of bonds because fixed income expertise can’t be readily pre-programmed. Top managers can deliver truly top returns.

Here’s the main reason why bond indexing is bad. Let’s consider stock indexes, which are weighted by company size. Generally, the larger the firm, the more it matters in the index’s performance.

If you “buy by size” in the debt markets, it’s counterproductive. Stock market value for indexes doesn’t include debt, but bond markets are all debt by definition. Follow the computers in Bondville and you’d maximize your exposure to the bonds of the firms that borrow the most money!

That’s the opposite of what we’re looking for in bonds, where our goal is to maximize our “coupon” (the percentage yield) while minimizing our risk.

Let’s pick on HYG again. One of its largest holdings is SiriusXM (SIRI). Now I love SiriusXM radio. But I admit I’m a musical dinosaur–and I’d go broke buying bonds based on my own consumer habits!

(Confession: I’ve been a paying customer since 2013 when my Acura came fitted with Sirius and an extended free trial. I will give Bloomberg Radio the official credit for hooking me even though the “smart money” knows that the “80s on 8” station is indispensable too!)

Catching Asia Market’s Open on My Commute Home

Vehicle drivers have more audio options today. It’s easy to connect a mobile phone via Bluetooth, for example. SiriusXM’s “gravy train” of old users like me with ingrained habits is increasingly compromised.

As a result, SiriusXM takes on lots of debt—$9.2 billion to be specific—to keep the party rolling. How many people younger than your editor are opting for the SiriusXM installation on their new cars? These are not my favorite bonds.

And investors buying HYG are not going through this thought process!

ETF Fatal Flaw #4: False Sense of Liquidity

And here’s the “market meltdown” kicker on why you should always avoid bond ETFs:

They are subject to meltdowns if panic selling occurs.

Here’s why. If you sell HYG today, you’ll get your money in exchange for your shares. And it will be iShares’ problem to settle up their end (by selling those SiriusXM bonds and more).

Problem is, we’re talking about bonds rather than stocks here, and there is no readily available liquid market for that SiriusXM paper. Which means if a lot of selling occurs, HYG itself may take a hit if it has to unload its bonds at a discount (say, 70 or 80 cents on the dollar) to meet investors’ withdrawals.

CEFs like PDI don’t have this problem. They have fixed pools of assets, which help their managers ride out ups and downs. As long as they buy good bonds that are funded by reliable cash flows, they’ll be fine.

Pro Tip: There’s a Better Way to Buy Bonds

Fund selection matters more than ever today. Because the real opportunity in bonds right now isn’t trading them for price gains—it’s locking in serious income streams.

Funds like PDI are among my favorite holdings for anyone looking for steady, meaningful yield.

They deliver the kind of income most traditional bond funds simply can’t match—while being just as easy to buy as any stock.

More importantly, they allow income investors to do something incredibly powerful:

Live comfortably on dividends alone… without drawing down principal… without worrying about outliving your savings.

In fact, this idea—building a portfolio that pays our bills without forcing us to sell assets—is the cornerstone of my No Withdrawal strategy.

Please read on and I’ll share the details with you.

The world is always burning somewhere.

At times like these, our Contrarian Income Report dividend strategy shines. Our portfolio yields 8.2% on average, and those dividends roll in no matter what the world throws at us.

The result? No need to sell into a downturn to get the cash we need. And we get the chance to go on offense, too, snagging dividends on the dips and boosting our income stream (and upside potential) as we do.

Rinse and repeat.

We especially love stocks and funds that pay us monthly, for two reasons:

1. They line up perfectly with our bills.
2. They let us reinvest our dividends faster—especially when markets dip.

The problem for most investors is that they limit themselves to the fan favs of the S&P 500, and there are virtually no monthly payers there. But we know there are plenty to be found if we hunt just a little off the beaten path.

Best of all, we can get those high monthly divvies without giving up the large caps we already hold. The key is to buy them through closed-end funds (CEFs), which yield around 8% on average. Plus, most of the 400 or so CEFs out there pay dividends monthly.

Here are two that stand out now.

Monthly Dividend Pick No. 1: A Diversified Pick With an 8.2% Dividend 

The BlackRock Enhanced Equity Dividend Trust (BDJ) is purpose built for a market like this. For starters, its portfolio is balanced among stock sectors—finance is the biggest slice, at 19% of assets, followed by industrials (14.5%), healthcare (14.2%) and technology (12.5%).

Then it goes further, adding in a dash of global exposure, with about 12% of assets outside the US, in stable countries like the UK, South Korea, Germany and Canada.

Let’s get to what we really want to know about here: the (monthly!) dividend, which is not only hefty but has risen a stout 32% in the last decade (not including special dividends, which BDJ has paid five times in that span):

Source: Income Calendar

The fund aims to hold at least 80% of its portfolio in dividend-paying stocks. Right now, its holdings include the likes of Amazon.com (AMZN) and medical-device maker Baxter International (BAX), both of which stand to gain as AI boosts their efficiency; Dollar General (DG), which is nicely set up as consumers cut costs; and BP plc (BP), a clear winner from rising oil.

BDJ further bulks up the divvie by selling options on about half of its holdings. That increases income, particularly in volatile markets.

But despite these strengths, investors have unfairly tossed BDJ aside. As I write this, the fund’s discount to net asset value (NAV, or the value of its underlying portfolio) sits at 6%, having nearly doubled since hostilities broke out in Iran.

BDJ Goes On Sale—as Its Discount Looks for a Bottom

That’s a clear overreaction. And if you look at the right side of that chart, you can see that its discount is looking to form a bottom. That sets up a nice entry point for those on the hunt for a well-diversified monthly paying stock fund.

Monthly Dividend Pick No. 2: An 11.5% Payer With a “Discount in Disguise”

We’ve talked in recent days about how AI is deflationary because it caps wage growth as businesses automate more tasks. Add a cooling job market and a new Fed chair who’s likely to lean toward lower rates, and you get a strong outlook for bonds.

The PIMCO Corporate & Income Opportunity Fund (PTY) is perfectly set up for that. The fund stands out for a lot of reasons, but a key one is the long effective maturity on its credit assets: just over seven years as I write this.

That’s important because longer-duration bonds do better when rates decline, as they’re more attractive than new (and lower-yielding) debt.

Moreover, PTY’s effective leverage-adjusted duration is 3.8 years. That’s enough to position it for gains on lower rates without taking on too much risk if rates rise. With all that in mind, it’s surprising (to me) that PTY is trading at such a bargain now.

That might sound like an odd thing to say about a fund that trades at a 6.5% premium to NAV. But with CEF discounts and premiums, context is everything. And the truth is, PTY is on sale at that level. In fact, that premium is lower than it’s been since the bond (and stock) meltdown of 2022.

PTY’s “Discount in Disguise”

The fund’s drop in valuation is overdone. And if you look at the right side of that chart, it looks like that premium is carving out a bottom, similar to what’s happening with BDJ.

But why the premium in the first place?

It’s simply because PIMCO, founded by legendary investor Bill Gross in the ’70s, has long had an almost superhuman mystique. That’s why most of its funds trade at premiums—many with bigger ones than PTY.

Even without the “PIMCO aura,” it’s tough to argue that PTY hasn’t earned a premium. The fund has been around since 2002, longer than the benchmark US corporate-bond ETF, the SPDR Bloomberg High Yield Bond ETF (JNK). In the years since, PTY has clobbered that benchmark.

PTY Laps JNK—Again and Again

Reinvested dividends drove that return, thanks to PTY’s huge monthly payout.

A Reliable 11.5% Dividend

Source: Income Calendar

Despite a slight cut during COVID, PTY’s payout has held steady for years. And besides, its regular special dividends (the spikes and dips above) have gone a long way toward making up for that cut.

I expect that to continue as the wind shifts toward lower rates and this proven income generator reclaims the premium its track record deserves.

Boost Your Income Even More With My #1 Monthly Payer (Yields 11% Now)

These 2 CEFs are strong plays for a jumpy market. But my favorite bond CEF is even better.

It’s ridiculously oversold, for one—and it kicks out an 11% dividend that (of course!) drops into our accounts every single month.

An 11% payout means we’re getting $11,000 a year for every $100K invested.

$22,000 on every $200K.

$500K? A sweet $55,000 in yearly dividends. 

And with those payouts rolling in every month, the next one is always just a few days or weeks away.

Which is why I’m urging income investors to grab this 11% payer now. The longer you wait, the more payouts you’ll miss. Click here and I’ll tell you more about this bargain-priced 11% payer and give you a free Special Report that reveals its name and ticker.

Wherever you stand on the conflict, let’s set that aside for a moment and look at the situation through an investment lens—specifically what it means for those invested in oil, either directly or through shares of producers.

It’s clear that anyone holding oil and oil-related stocks saw a bump in their share prices after hostilities broke out, and prices have bounced higher and lower since.

Let’s look at exactly what’s played out so far this year (as of this writing) from the oil-price side—through the crude-tracking United States Oil Fund (USO)—and the producer side, through the Energy Select Sector SPDR Fund (XLE). XLE holds big US oil majors like ExxonMobil (XOM) and Chevron (CVX).

Oil ETFs Surge

It’s just another example of oil’s ability to deliver big short-term gains on geopolitical worries. But the real risk with oil is that, while it can deliver strong gains in the short run, in the long run, it has historically lagged stocks. It’s been far more volatile, too.

In other words, to really make money in oil, you need precise timing—on both your buys and sells. (And it doesn’t hurt to have nerves of steel, either!) To see what I mean, let’s look at the performance of the above two oil ETFs in comparison to the benchmark SPDR S&P 500 ETF Trust (SPY), in blue below:

Oil Tends to Lose Over the Long Haul

If we go back as long as all of these funds have been around (in the mid-2000s), we see that buying an index fund has been far more profitable than investing in oil funds.

It just goes to show that in investing (particularly in more volatile areas like oil), one of the biggest risks isn’t choosing the wrong stocks. You can also go wrong by choosing the right stocks, but doing so at the wrong time.

When I first started working on Wall Street in the early 2010s, many of my bosses, co-workers and clients would repeat the adage that “Being too far ahead of your time is indistinguishable from being wrong.” This phrase comes from legendary value investor Howard Marks, of Oaktree Capital Management.

That piece of wisdom shows up clearly with oil. Even over the last 10 years, investing in crude (again, either directly or through producers) would have been a much less profitable move than simply buying an S&P 500 index fund, as you can see below.

Even “Shorter-Term” Oil Investments Underperform

This is why we avoid oil funds in my CEF Insider service. We’re in it for the longer term and the dividends—and energy-focused funds just don’t support those goals.

When it comes down to it, a portfolio holding a diversified collection of CEFs holding stocks, bonds, real estate investment trusts (REITs) and other asset classes is a much better proposition. What’s more, we don’t need to “time” our entrances and exits as cleanly as resource investors must, so our approach is a lot less work, too!

By the way, that focus on dividends is why we look to CEFs, not ETFs. SPY, after all, yields just 1.1% as I write this. That means we’re relying on capital gains to get the cash we need. And to take those profits, we’re going to have to sell our SPY shares. This, of course, raises the risk of being forced to do so in a downturn.

This is where closed-end funds (CEFs) come in. Take a look at the performance of a CEF called the Adams Diversified Equity Fund (ADX), in orange below. Over the last decade, this equity-focused CEF (current yield: 8.2%) has posted a total return ahead of SPY (and by extension our two oil ETFs, too):

ADX Outruns Stocks, Yields 8.2%

The nice thing about ADX is that it mainly holds S&P 500 mainstays like NVIDIA (NVDA), Apple (AAPL) and Microsoft (MSFT). Those, in fact, are the top-three positions for both SPY and ADX at the moment. Yet ADX has still outrun the index fund over the last decade (and most other long-term time horizons, I should add).

And thanks to its 8.2% yield, the income stream you get from ADX is more than seven times greater than what you’d collect from SPY.

Now, we do need to bear in mind that ADX’s dividend is tied to the performance of its underlying net asset value (or NAV), so it can fluctuate somewhat. But the fund still targets an 8% payout, based on NAV, so we can still expect an income stream far larger than that of SPY here.

One other thing to note is that the fund has seen its discount to NAV narrow lately, to around 4%, putting it right around my buy-up-to price. So while it may not be a top destination for new money now, it’s worth picking up on a dip. Members of my CEF Insider advisory get up-to-the-minute advice on when the best time to add ADX will be.

But our key takeaway is clear: Funds like ADX are a far better alternative than SPY, giving you much higher dividends while keeping your exposure to many of the same US large caps. Oil stocks? Their performance isn’t even close—and they’re likely to give you way more risk (and stress), too.

Get My Latest Call on ADX, and My Top 5 Monthly Dividend CEFs, Right Here

Like I said, the best way to know exactly when to snag ADX at the best price (and the highest yield) is to take out a subscription to CEF Insider.

And you’re in luck: Right now, I’m offering a 60-day “road test” of the service with no obligation whatsoever.

That’s not all.

I’ve also put together a portfolio of monthly dividend CEFs that pay you steadily, month in and month out. These 5 funds—my top 5 picks among monthly payers—yield a rich 9.3%, too. They’re the perfect complement to the more-growth-focused ADX.

Here’s how to take advantage of this unique wealth- (and income-) building offer:

Simply click here and I’ll walk you through these 5 funds and give you the chance to download a free Special Report revealing their names and tickers. You’ll also get my VIP invite to try CEF Insider, too.

The contrarian opportunity? Big yields up to 15.6% in BDC Land. Some of these deals are trading for as little as 72 cents on the dollar.

Which means opportunists like us have been handed something rare: wild yields of 11% to 15.6% for as little as 72 cents on the dollar.

Business development companies (BDCs) are “Main Street bankers” because they do what Wall Street won’t: provide capital to small and midsized businesses that the big banks either ignore entirely, or won’t touch without demanding a firstborn as collateral.

And they don’t just serve the little guys. They pay them, too—or rather, they pay us. BDCs are structured just like real estate investment trusts (REITs), with a similar mandate to distribute 90% of their profits as dividends in exchange for their tax-privileged structure.

The result? An industry-wide yield that makes the broader financial sector look like it’s barely trying.

But these aren’t normal times for financials broadly, or BDCs specifically.

Despite what was an otherwise solid earnings season, banks and financial firms have taken it on the chin: mounting recession worries, skyrocketing oil prices, Federal Reserve uncertainty. It’s a cocktail of doom.

And BDCs Got an Extra Shot Poured In

Fresh fears about private credit—the primary playground of many BDCs—have rattled investors. A few months after the bankruptcy of auto-parts supplier First Brands exposed some cracks in the market, more are appearing. Companies like Blue Owl (OWL), BlackRock (BLK) and Blackstone (BX) have been selling off fund assets, merging BDCs, and quietly limiting investors’ ability to withdraw. Not exactly confidence-inspiring headlines.

BDCs are also being weighed down by the growing AI-led disruption of the software industry; a recent Reuters report says “Barclays pegs the average BDC’s software exposure at about 20%,” and reminds us that because of the asset-light nature of these businesses, “lenders risk getting very little of value in future bankruptcies.”

In short: BDCs as a whole are cheaper for a reason. Which means we want to figure out whether these 11.0%-15.6% yields are cheaper because they deserve to be—or if they’ve been thrown out with the bathwater.

Gladstone Investment (GAIN)
Yield: 11.0%

Gladstone Investment (GAIN) focuses on financing lower-middle-market companies that generate EBITDA (earnings before interest, taxes, depreciation and amortization) of between $4 million and $15 million annually. It favors firms with a proven business model, stable cash flows and minimal market or technology risk.

That last part may very well explain why GAIN has held up so well in recent months.

In early February, Morgan Stanley mapped out how much exposure (as a percentage of fair value) that dozens of BDCs had to both software companies and information technology service firms. The data was from Q3 2025 reports, so it’s a little behind companies that have since reported Q4 earnings, but it’s directionally helpful.

Gladstone’s relatively tiny portfolio of 29 companies, for instance, has absolutely no exposure to either field; most of its holdings are concentrated in business/consumer services, consumer products and manufacturing.

I’ve pointed out in the past that Gladstone Investment has “a much bigger hunger for equity than the average BDC.” Gladstone says the average BDC has roughly 5%-10% equity exposure, but its target mix is 75% debt/25% equity. This high amount of equity shields it more from the weight of interest-rate declines than many of its peers.

One result of this deal mix is that its regular monthly dividend comes out to just 7%—high compared to the average stock, but low as far as BDCs are concerned. That said, it also pays substantial supplemental distributions when it realizes gains on equity investments—at least once per year over the past few years, sometimes more. If we factor in special one-time distributions over the past year, that yield jumps to 11%.

GAIN’s discount to its net asset value has widened in recent months, and it now trades at 91 cents on the dollar. That’s often the result of price declines, but not here. Instead, Gladstone Investment has enjoyed a rapid rise in net asset value over just the past few quarters, from $12.99 per share as of the middle of last year to $14.95 by calendar 2025’s end.

Gladstone Has Been Able to Tread Water While Other BDCs Sink

SLR Investment Corp. (SLRC)
Yield: 11.1%

SLR Investment Corp. (SLRC) invests primarily in senior secured loans of private U.S. middle market companies, but it does have some specialties. Within that broader debt type, it specializes in cash-flow loans, asset-based loans, equipment financings and, to a lesser extent, life science loans.

Unlike Gladstone, SLR has below-average equity exposure of just 2% right now. But it still has quite a few qualities:

• Only 65% of its investment portfolio is floating-rate, so it still has some protection against drops in interest rates.
• It has an extremely high number of portfolio companies compared to the average BDC. Currently, it has 880 holdings across 110 industries.
• It also has precious little exposure to the weakening areas of tech. The company noted in its Q4 report that it has only about 2% exposure to software (and Morgan Stanley says it has no IT services exposure). Michael Gross, co-CEO, clearly read the room, writing in the release that SLRC’s assets “can be viewed as a more attractive alternative relative to increasing investor concerns about private market industry exposure to software companies.”

SLR Investment announced Street-matching earnings in late February—not great, but still better than the weak reports from many of its peers. Shares have been trailing off regardless, but that’s par for the course for SLRC, whose numerous volatile dips over the years open up brief windows of higher-than-average yield and deeper-than-usual discounts. Currently, SLRC trades at a 19% discount to NAV.

SLRC Doesn’t Eclipse 11% Yield Territory Often, And When It Does, It’s Fleeting

Goldman Sachs BDC (GSBD)
Yield: 15.6%

Goldman Sachs BDC (GSBD), which provides financing to companies with annual EBITDA of between $5 million and $75 million, currently invests in just more than 170 companies spanning a dozen industries.

It’s also one of several dividend payers that Wall Street’s analyst community can’t stand. Investors clearly don’t love it, either, as GSBD is perpetually sale-priced; it currently trades at a steep 28% discount to NAV.

But why?

For one, despite the resources and name recognition from its ties to mega-cap investment bank Goldman Sachs (GS), GSBD has been an absolute stinker. It also slashed its core payout by 29% in 2025, switching to a base-and-supplemental system temporarily bolstered with special dividends (on top of the base and supplementals) that have since disappeared.

The End Result: Lower Quarterly Aggregate Payouts

We can add another reason: High exposure to the tech industry. As of the end of 2025, software was Goldman Sachs BDC’s single largest industry by fair value, making up about 18% of the portfolio.

I’ll point out that GSBD is barely down in 2026, which is much better than many of its peers. That could be, to some extent, because the BDC isn’t taking the software risk sitting down.

The company has an AI-risk framework to evaluate all new underwriting, and it has been aggressively ditching investments it views at high risk of being disrupted. Recently, President and COO Tucker Greene admitted the company exited a software loan it had held for eight years. There were no signs of deterioration. Greene simply flipped it for $0.99 on the dollar to get ahead of future AI disruption.

PennantPark Floating Rate Capital (PFLT)
Yield: 15.2%

PennantPark Floating Rate Capital (PFLT) targets midsized companies that generate $10 million to $50 million in annual EBITDA. It currently invests in more than 160 portfolio companies spread across roughly 110 private equity sponsors.

It’s also a “value-added” BDC that lends its expertise in specific industries, hence its portfolio focus on five categories: health care, consumer, business services, government services and—ahem—software and technology.

Good news on that last bit: As of the end of 2025, PFLT sported just about 4% exposure to the software sector. And its credit situation in general is good, with just four loans on non-accrual (representing just 0.5% of the portfolio at cost).

So Why Has PennantPark Taken It on the Chin?

Its most recent earnings report probably didn’t inspire confidence. I’ve mentioned previously that PFLT’s dividend has been frequently outstripping its net investment income (NII). It happened again in Q4, with its core NII of 27 cents per share coming in lower than the 30.75 cents it paid across three monthly dividends. Management continues to insist that “our run rate NII is projected to cover our current dividend as we ramp the PSSL II portfolio,” referring to its PennantPark Senior Secured Loan Fund II joint venture.

Still, that NII was short of estimates, NAV declined by 3%, and the company had to mark down several investments.

It’s a precarious position—so it’s unsurprising we’re being offered a massive 15% yield, at a 23% discount to NAV, to risk it.

A Fully Paid Retirement for Just $600,000?

The 15% yield is phenomenal. So is the monthly delivery schedule.

But if we want to retire on dividends alone, we need dividends that don’t appear to be one or two more disappointing earnings reports away from being cut.

Put differently: We need the kinds of dividends you’ll find in my “9% Monthly Payer Portfolio.”

These generous stocks and funds pay up to 14.9% and average more than 9% across the board. That’s enough to live on dividends alone—without ever needing to sell a single share to generate cash.

The math on this portfolio is easy to follow:

• A $600,000 nest egg could earn $54,000—in many places in the U.S., that’s enough for a fully paid retirement without even factoring in Social Security!
• And if you have managed to stow away a cool million bucks to work with, the 9% Monthly Payer Portfolio would pay you a downright lush $90,000 in dividend income every year.

Better still? You’d be cashing dividend checks not annually, not quarterly, but each and every month. That means no “lumpy” payouts. No complex dividend calendars. No dumping money into certain stocks because you’re getting underpaid every third month.

Just paydays as smooth as when you were collecting a paycheck!

Don’t miss out on these terrific income plays while you can still get in at bargain prices. Click here for all the details, and turn your portfolio into a monthly dividend machine.

After all, the CEFs we hold in the portfolio of our CEF Insider service offer transparency, high (and often monthly paid) dividends and attractive discounts, too, in part due to geopolitical worries.

We’ll get to a specific bond fund that’s giving us a generous discount and an 11.6% dividend in a moment. First, let’s take a closer look at what’s really happening with private credit, and the opportunity that concerns around it are setting up for us now.

Inside the Private-Credit Drama 

Here’s the key difference between private credit and the bonds held by our CEFs: Our funds’ holdings are far more transparent. Their assets tend to be publicly traded, with prices that are easily accessible by the general public.

Private credit, on the other hand, tends to be tougher to value, as these loans are not traded regularly. That can create a false sense of security among some investors, who may feel that just because a loan’s market price doesn’t change regularly, its actual resale price on an open market wouldn’t change, either.

Some billionaires see opportunity here: Activist Boaz Weinstein, for example, is taking a break from targeting CEFs to go after private-credit funds, offering to buy out shareholders at big discounts to these funds’ NAV.

His moves are justified: Private-credit mainstay Blue Owl Capital, for example, recently halted redemptions in a fund that holds billions in private loans, causing the firm’s shares to plummet.

Private-Credit Poster Child Collapses

Meanwhile, BlackRock limited withdrawals from its $26-billion HPS Corporate Lending Fund, while elsewhere marking down a loan from 100% of its presumed fair market value to zero in months. The firm also cut the dividend on the BlackRock TCP Capital Corp. (TCPC) fund, causing that fund’s shares to crater, even as they were already falling.

TCPC Drops on Dividend Cut

Private-credit worries have caused downward pressure on business development companies (BDCs) more generally. These lenders issue loans to small- and mid-sized firms. And since BDCs get a pass on corporate tax if they hand at least 90% of their income to investors as dividends, they tend to offer high yields (hold that thought for a moment).

Consider the VanEck BDC Income ETF (BIZD), a good BDC benchmark, which yields around 13% now. Over the past year, though, BIZD’s total return has declined about 16%, as of this writing.

This shows that, when it comes to BDC investing, we need to be selective, since the small- and mid-sized companies these firms lend to are riskier than larger businesses.

But let’s bring this back to CEFs. What I really want to highlight here is the fact that weakness in private credit stands to push income investors toward CEFs. That goes double for funds holding highly transparent corporate bonds.

That’s because these funds can go toe-to-toe with any asset class when it comes to dividends. Consider the Nuveen Core Plus Impact Fund (NPCT), a CEF Insider holding that currently yields 11.6%. That payout comes our way monthly, too.

Yields like that are likely to catch the attention of investors looking for alternatives to private-credit funds. And here’s something else that stands out about NPCT as an alternative to private credit: The fund gives us its value every day through its public discount to net asset value (NAV, or the value of its underlying portfolio).

As I write this, the fund trades at an 8.1% discount to NAV, much wider than the 5.5% discount it offered prior to the start of the war in Iran:

NPCT Goes on Sale

And as we can see below, this discount is almost entirely sentiment-driven: While the fund’s market-price return (in purple) has declined, its underlying portfolio value, including dividends collected (or total return NAV) has held steadier:

Sentiment, Not Portfolio Value, Gives Us a Deal on NPCT

That’s the kind of setup we love—and it’s why I continue to recommend NPCT. I expect some private-credit investors may feel the same in the near future, if they don’t already.

My 5 Top Monthly Dividend CEFs Pay Out 60 Times a Year (and Yield 9.3%, Too)

NPCT is just the start. Truth is, high-quality corporate-bond CEFs are at the heart of my “60 Paycheck Dividend Plan.”

As the name suggests, the 5 CEFs that make up this plan each pay dividends monthly. That’s 5 dividend payouts a month, or 60 every year! They throw off a 9.3% average dividend, too.

I’ve put all 5 of these monthly payers together in a “mini-portfolio” all their own. I’m urging all investors to take a close look at it now.

Oh, and there’s more for us here than “just” that 9.3% average payout. These funds also trade at unusual (and undeserved) discounts, putting strong upside on the table.

Now is the time to buy them and start your 60 “paycheck” income stream as soon as possible. Click here and I’ll tell you more about these 5 stout monthly income plays. I’ll also give you a free report revealing their names, tickers and my full analysis of each one.

The trick is to convert the pile of cash into cash flow that can pay the bills. I’m talking about $40,574.93 per year in dividend income on that nest egg, thanks to 8%+ average yields.

These are passive payouts that show up every quarter or, in many cases, every month.

Meanwhile, we keep that $500K nest egg intact. Or, better yet, grind that principal higher steadily and safely.

Got more in your retirement account? Cool—more monthly dividend income for you!

We’ll talk specific stocks, funds and yields in a moment. First things first, let’s wipe the false promises of mainstream finance from our minds.

Step 1: Forget “Buy and Hope” Investing

Most half-million-dollar stashes are piled into “America’s ticker” SPY. The SPDR S&P 500 ETF (SPY) is the most popular symbol in the land. For many 401(K)’s, this is the “go to” ticker.

Sad because SPY doesn’t pay. It yields just 1.1%. That’s $5,500 per year on $500K… poverty level stuff.

When we retire, we need passive income to replace our active paychecks. SPY won’t get it done.

Step 2: Ditch 60/40, Too

The 60/40 portfolio has been exposed as senseless. Retirees were sold a bill of goods when promised that a 60% slice of stocks and 40% of bonds would somehow be a “safe mix” that would not drop together. That can work—but not always, and that “sometimes” can really hurt!

Oops.

Think back to 2022 when inflation — plus an aggressive Federal Reserve — drop-kicked equities and fixed income before they went on a serious bull run in 2023, 2024 and into 2025 (with a brief interruption for the April “tariff tantrum.”)

It just goes to show that bonds are not the haven guaranteed by the 60/40 high priests. They could easily fall just as hard (or harder) than stocks in the next economic crisis.

In 2022, for example, US Treasuries plunged, which resulted in the iShares 20+ Year Treasury Bond ETF (TLT) getting tagged.

Sure, it still paid its dividend. But even including payouts, the fund was down 31% — worse than the S&P 500. Ouch!

When stocks and bonds are dicey, where do we turn? To a better bet.

A strategy to retire on dividends alone that leaves that beautiful pile of cash untouched.

Step 3: Create a “No Withdrawal” Portfolio

Tom Jacobs and I wrote the book on a dividend-powered retirement. In How to Retire on Dividends: Earn a Safe 8%, Leave Your Principal Intact, we outline our “no withdrawal” approach to retirement:

1. Save a bunch of money. (“Check.”)
2. Buy safe dividend stocks with big yields.
3. Enjoy the income while keeping the original principal intact.

To make that $500k last, and our working and saving lives pay off, we really need 8%+ yields. And while we typically don’t see these stocks touted on Bloomberg or CNBC, they are around.

Of course, there are plenty of landmines in the high yield space. Some of these stocks are cheap for a reason. Which is why we need to be contrarian when looking for income.

We must identify why a yield is incorrectly allowed to be so high. (In other words, we need to figure out why the stock is priced so cheaply. Going by the yield alone is like reading only the headlines. We read the whole article—and much, much more!)

The 24 stocks and funds in my Contrarian Income Report portfolio average an 8.1% payout today. This collection of monster dividends spins off $81,149.86 a year for every million dollars invested!

24 Safe Payers for $81,149.86 in Dividends?

?Source: Income Calendar

And you don’t have to be a millionaire to take advantage of this strategy. A $500K nest egg will create a still appetizing $40,574.93 in annual income. A delectable dividend meal.

24 Safe Payers for $40,574.93 in Dividends

Source: Income Calendar

?The important thing is that these yields are safe, which creates stability for the stock (and fund) prices attached to them. We want our income, with our principal intact. It’s really the only way to retire comfortably, without having to stare at stock tickers all day, every day.

Now, many blue-chip yields are safe, but small. They just need to hit the gym and bulk up a bit. Here’s how we take perfectly good yet modest dividends and make them into braggarts.

Step 4: Supersize Those Yields

Mastercard (MA) is a near-perfect dividend stock. Its payout is always climbing, nearly doubling over the last five years. (MA shareholders, you can thank every business that accepts Mastercard for your “pennies on every dollar” rake.)

Tap, tap, tap. Remember cash? Me neither. Another 2020 casualty, with Mastercard making a few dimes or dollars on every plastic transaction.

The cashless tsunami has been in motion for years, but international growth prospects remain huge! Just a few years ago, 80%+ of transactions in Spain, Italy and even tech-savvy Japan were in cash. We expect more dividend hikes as global cash morphs to plastic and Mastercard benefits.

The only chink in MA’s armor? Everyone knows it is a dynamic dividend stock. Investors keep bidding it higher, knowing that the next dividend raise is just around the corner. That’s why it only yields 0.6% and rarely more.

So, the compounding of those hikes makes MA a great stock for our kids and grandkids. You and I, however, don’t have the time to wait for 0.6% to grow. And $3,000 on our $500K nest egg simply won’t get it done—to say the least!

Let’s instead consider top-notch closed-end fund (CEF) Gabelli Dividend & Income Trust (GDV), managed by legendary value investor Mario Gabelli.  Mastercard is Gabelli’s largest holding. But we income investors would prefer GDV because it boasts a nifty 6.4% dividend, paid monthly.

Not only that, but thanks to its obscurity, we have an opportunity to buy Mario’s portfolio for just 88 cents on the dollar. Yup, GDV trades at a 12% discount to its net asset value, or NAV. It’s a great way to boost MA’s payout and snag a discount, too.

Where does this discount come from?

CEFs have fixed pools of shares, so emotion can (and does) drive their prices below their NAVs, or “fair” values (the value of their holdings minus any debt). That’s when we contrarians step in to buy underrated CEFs at generous discounts. We never “pay full price!”

GDV holds other blue-chip dividend payers alongside MA, such as Microsoft (MSFT) and JPMorgan (JPM). These stocks have soared over the past year, but with GDV, we have an opportunity to purchase them at a 12% discount.

These high-quality stocks wouldn’t normally qualify for our “retire on $500K” portfolio because everyone in the world knows they are nice long-term investments. Even though these companies consistently raise their dividends, investor demand for the stocks keeps their prices high and current yields low. They never meet our current yield requirement.

GDV does. Its monthly dividend adds up to a 6.4% annual yield.

But Brett, 6.4% ain’t 8%. Good point, so let me give you one more idea. Eaton Vance Tax-Managed Global Diversified Equity (EXG) is another CEF with a similar blue-chip dividend portfolio. But EXG generates even more income than GDV by selling covered calls on the shares it owns. More cash flow means a bigger dividend—and EXG pays an elite 8.6%!

So, do we buy and hold EXG and GDV forever, collecting their monthly dividends merrily along the way? Not quite.

In bull markets, these funds are great. But in bear markets, they’ll chew you up.

Step 5: Protect That Principal!

My CIR readers will fondly recall the 15 months we held GDV and EXG, collecting monthly dividends plus price gains that added up to 43% total returns.

What was happening in that time period? The Federal Reserve printed money like crazy. Yes, it did stoke inflation, but we enjoyed a more-than-offsetting boost in asset prices.

Starting in 2022, we had the opposite situation. The stock market was topping, and we didn’t want to fight the Fed. We sold high and avoided losses on the other side:

EXG and GDV: Dropped 13% After We Cashed In

For whatever reason, “market timing” is a taboo phrase among long-term investors. That’s a shame because it is quite important. By aligning our dividends with the market backdrop, we can protect our principal from bear markets like we saw back in 2022.

Step 6: Start Here to Retire on $500K

“Tried and true” money advice—like the 60/40 portfolio and the 4% withdrawal rule—have been properly exposed as broken. Good riddance!

I’d love to tell you more about my solution, the 8% “No Withdrawal” Retirement Portfolio, including my favorite stocks and funds to buy right now.

We might need to rename the next edition of our book “We’re Banking 8% Payouts Today!”

Who are these dividend darlings paying more than 8% and flashing BUY signals? Click here and I’ll reveal all the profitable details.