A Closed-End Trio For Steady Income

Money, Profit, Finance, Business, Return, Yield

Closed-end funds provide the role of ensuring significant diversification so that our income remains steady whatever weather the world throws at us this year.

The funds in our portfolio have a primary focus, buying in certain sectors or types of investments. This means you can gain instant diversity and exposure to dozens or even hundreds of tickers in a sector by buying a couple of funds.

What sets our CEF picks apart from ETFs is that they are "actively managed", meaning that a manager is actively deciding what to buy and sell.

A well-managed CEF will outperform the indexes in its sector. Therefore, at HDO, we take the manager of the particular CEF that we invest in very seriously, his track record, his portfolio, management team, and skills to maximize profits in good and bad times.

Second, some funds use leverage. Leverage amplifies positive and negative returns. So when you are very bullish on a sector, you want to look for leveraged funds.

The best thing about CEFs is that they tend to be very friendly to income investors. They pay out the majority of income and capital gains through dividends. Resulting in a relatively stable price over time and a hefty stream of dividends.

CEFs are the workhorses of our dividend garden. Providing a steady income stream while allowing us to quickly gain diverse exposure to a wide variety of investments.

Tekla Healthcare Opportunities Fund — yielding yield 5.8%

If you are looking for growth at bargain prices, there is no better place to invest other than the healthcare sector. Despite having very strong tailwinds, this is one of the cheapest sectors that the markets offer today.

We can be very thankful that we live in a time where medical care is advancing, making illnesses and injuries that were once a death sentence, survivable. Heart surgery, knee and hip replacements, cancer treatments, and more have advanced at an incredible rate over the past 40 years. The costs have advanced right along with it.

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