Closed End Funds

Closed end funds are professionally managed investment companies that typically trade on a major stock exchange.  They have long been a solid choice for investors who seek the traditional advantages of open-end funds, and who can appreciate the unique advantages of a closed end investment vehicle.  They offer investors an opportunity for high dividend yields and potential investment appreciation through dividends and distributions and capital appreciation.

For more information on closed end funds check out the trade group website of the Closed End Fund Association (www.cefa.com) or www.ETFconnect.com which provides much information and tracking capabilities of closed end funds.

Click HERE for an easy to understand “Guide to Closed End Funds” 

Capital Investment Advisors have become leaders in our closed end fund research and tracking.  We have our own in-house research team that tracks these investments on a daily basis

Preferred Securities

Preferred securities are stocks that act like bonds and pay significantly higher dividends.  They are junior in safety ratings to bonds but also have a higher yield.  We like to buy these at par or below par when possible.  A good website for information and listing of preferreds is www.quantumonline.com. 

Convertible Securities

These are either bonds or preferreds that instead of giving you money back at the end of a term "convert" using a formula to the common stock of the corporation.  These are tough to value and can be quite complex.  We advise you to seek professional help when looking at convertible securities.  Like preferreds, check the website www.quantumonline.com for more information.
Once again, this is not meant to be an offer to buy or sell specific securities. Preferred stocks and convertibles  involve risk of the stock market (remember Enron) and no guarantees can be made about safety and security (which should be obvious, but we'll say it anyway).

High Dividend Stocks (REIT's, Royalty Trusts, Utility Stocks, etc)

Some stocks, such as Real Estate Trusts and Energy Royalty Trusts exist primarily to share revenue. There is also a chance of some appreciation as well, giving investors a little of both parts of the market. You have to be very careful in purchasing such stocks. Among the characteristics to look for is a solid history of dividend payments and a strong percentage of ownership of such stocks by institutional investors. We select stocks with excellent cash flow and strong financials. 

U.S. Government Bonds

Safe and secure but with very low interest rates and a declining number of bonds in the market make these quite unattractive to many investors. If this is the case for you, take a look at U.S. Government Closed End Trusts discussed above. By purchasing the closed end trust at discount, you will magnify the impact of the coupon payout plus get trading gains made by the fund manager.

Corporate Bonds

A corporate bond is a debt security issued by a corporation, as opposed to those issued by the government.  A corporate bond typically has a par value of $1,000, is taxable, has a term maturity and is traded on a major exchange.

Tax-Free Municipal Bonds

You can now shop on line for muni-bonds at several sites. Among the sites listing current bonds - CNNfn's bond shopper. Link now and use their search engine. Also consider closed end funds that own municipal bonds, but note that these possess a much higher risk because of the use of leverage.

Reverse Mortgages

Sell your home but stay in it and collect a mortgage payment from the bank!

Click here for more information on Reverse Mortgages.

Bank Certificates of Deposit

For best daily list of CD rates go to the Bank Rate Monitor web site.

Money Market Funds

First, beware misleading ads.  Bank and insurance company MMF's advertise a 12 month number known as APY.  By contrast, Mutual Fund MMF's are required to quote 7 and 30 day yields only.  Compare apples versus apples though and you will find the 12 month performance of some higher yield mutual fund MMF's to be equal to or better than the bank MMF's. Of course, another major difference is that bank MMF's are FDIC insured. Other funds are not, although that has never been a concern in the past.  Two sources of information.  One focuses on bank and insurance company MMF's. 

Go to Bank Rate Monitor for that.

U.S. Savings Bonds

Two types of savings bonds these days - EE and I series. I-series offer inflation protection and pay a nice return. Check out the government web site at www.treasurydirect.gov.  While not for current income, we include these on this page because they are a "yield-side" investment and provide later income.  EE bonds have recently become less attractive investments than I-Bonds because of changes in regulations.