I’m sure I don’t have to tell you how tough it is to build a dividend retirement portfolio that provides a decent yield these days.
Many investors make utility stocks a cornerstone, but that strategy is less appealing this year, with many utilities’ valuations stretched and their yields well below long-term averages.
Take Duke Energy (DUK), America’s biggest utility by market value, whose trailing-twelve-month P/E ratio has climbed to 20.1 from 17.8 at the start of the year. Meantime, its yield has slumped to 4.1% from 4.5%.
But fear not, there’s another group of investments boasting even higher yields than utilities; I’m talking payouts of 6% and up. Better yet, many trade at deep discounts—and most investors completely ignore them.
I’m talking about closed-end funds (CEFs). They’re often confused with open-end funds—or what most people call mutual funds—but they’re way better than those stodgy old standbys. One reason why is that CEFs trade on the stock market, just like regular stocks.
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