What do you think about Closed End Funds (CEFs) [Article linked] (years, relation)

[Myghost]

https://www.forbes.com/sites/michael...h=3eabd6f12fcd


I found this article interesting. I don't have any experience with CEF's so I was wondering what others thought about it.

I'll start with an open-ended question, and hopefully I'll join the discussion, ask questions and or comment as I learn more.

[mathjak107]

quite a bit wrong in what is said about the 4% swr …

including the fact he says it is based on a study in 1990 …the trinity study was 8 years later in 1998 and it has since been updated more recently

so that is incorrect along with the other assumptions in the article.

for a 4% swr to hold one needs a 2% real return average over the first 15. years of a 30 year retirement .

over the last 123 rolling 30 year time frames we had , using a simple diversified portfolio of 60/40 or 50/50 has ended with more then one started 90% of the time using simple index funds .

all the gibberish about closed end funds is just that , a lot of gibberish.

also bill bengan the guy who looked in to safe withdrawal rates with his safemax did go on record as saying the 4% swr was likely wrong .

in practice it could be 4-1/2% more often then not , so the 4% swr is still alive and well

[Myghost]

Originally Posted by mathjak107

quite a bit wrong in what is said about the 4% swr …

including the fact he says it is based on a study in 1990 …the trinity study was 8 years later in 1998 and it has since been updated more recently

He also said that he has since disavowed that POV. I know your perspective on the 4%, and actually thought about that when reading this article. I guess my question is more related to better understanding CEF's, if they are a good investment for retirement, if the return is as likely (nothing is guaranteed) as suggested, what are the risks, etc.?

I'd like to avoid turning this into a debate about 4%, as that's not the point of the discussion.

[mathjak107]

meh , they are no better or worse then any other investment …

you can get stung as they sell at a discount or premium to net asset value .

buy at a premium and sell at a discount and you can lose money even if markets are flat .

personally i rather use either index funds or good managed open end mutual funds.

they are just as subject. to market ups and downs as anything else is

[don6170]

Originally Posted by Myghost

[url]I don't have any experience with CEF's so I was wondering what others thought about it.

I prefer to stay with more liquid assets for my portfolio. Why add the extra risk/hassle for some possible marginal gain.

[GWoodle]

Originally Posted by Myghost

https://www.forbes.com/sites/michael...h=3eabd6f12fcd


I found this article interesting. I don't have any experience with CEF's so I was wondering what others thought about it.

I'll start with an open-ended question, and hopefully I'll join the discussion, ask questions and or comment as I learn more.

CEF may be out of favor in relation to index funds, ETF's. Appear to have higher expense ratio. That expense makes a headwind to fight.

Performance may be helped by lower turnover rates. They do pay large dividend distribution.

USA is a stock fund. PTY is a bond find. RQI is a REIT. So they cover very different segments of the market.

You will have to look closer to see if you get any performance for the extra expense.

[GWoodle]

https://www.investopedia.com/ask/ans...-end-funds.asp

From Investopedia

Difference between ETF and CEF

[mitchmiller9]

Most CEFs use leverage. I've read PTY is 47% levered. I would want to buy a CEF when it is trading at a discount to NAV and when interest rates are low. The good thing about CEFs is the investment pool is fixed so theoretically the fund manager can take a longer-term approach.