About Closed-End Funds
Many closed-end funds trade at a discount in December, only to immediately bounce back to fair value in January. That's because investors looking to claim investment losses to ease their tax burden prompt a slew of selling.
However, as soon as the clock strikes midnight on New Year's Eve, the sellers pick up the funds they've ditched and the discount disappears. The deals are especially attractive this year.
About 75% of closed-end funds use leverage. Panicky investors have been bailing out of anything related to credit. Therefore, this is a good time to buy closed-end funds trading at a discount to their net asset value.
At www.etfconnect.com, you can see which closed-end funds are trading at a discount, as well as the size of these discounts. And the "rule" to keep in mind when buying any closed-end fund is to purchase the fund only when it is selling at a discount.
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However, as soon as the clock strikes midnight on New Year's Eve, the sellers pick up the funds they've ditched and the discount disappears. The deals are especially attractive this year.
About 75% of closed-end funds use leverage. Panicky investors have been bailing out of anything related to credit. Therefore, this is a good time to buy closed-end funds trading at a discount to their net asset value.
At www.etfconnect.com, you can see which closed-end funds are trading at a discount, as well as the size of these discounts. And the "rule" to keep in mind when buying any closed-end fund is to purchase the fund only when it is selling at a discount.
* * * * *
posted by Bob Moser at
4:44 PM
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