What You Need to Know About Investing in Closed-End Funds

Value investors love buying single dollar bills for 85 cents. That’s why closed-end funds, a long misunderstood mutual fund relative, attract certain sophisticated investors. A cross between a mutual fund and a stock, these funds have both a net asset value and a share price. Closed-end funds sometimes trade at double-digit discounts to net asset…

 

Paying a Premium to Take on More Risk

Would you willingly pay $1.25 for something worth $1.00? This is not a trick question. The data showing the current price and the actual value is clearly stated and easily accessible. Knowing this, would you pay $1.25 for something worth $1.00? In a world operating in accordance with the efficient market hypothesis (EMH), such price…

 

Protect Your Capital – Never Chase High Yield

This week’s AAII Weekly Digest highlights these “must-read” AAII articles:   Interest Rate Sensitivity and Bond Pricing How can it be that there are times when “safe” assets such as high-quality corporate bonds or U.S. Treasuries exhibit levels of price volatility that may normally be associated with the stock market? This article outlines a set…