Markets are very dangerous at the moment, as anyone investing is likely to see a loss of capital but for anyone starting out to acquire knowledge to build their Snowball, your Snowball should be different from the SNOWBALL, out of adversity comes opportunity.
As prices fall yields rise and as dividends rise, the yield you buy at should gently increase over time as long as you hold the share.
When you start your journey, the amount you can invest may be limited but compound interest takes a while to make a noticeable difference so that should be treated at a positive not a negative.
If you use the above table a dividend income Snowball yielding 7% would provide a retirement income of £21,474.00. Hopefully your yield could be higher, much higher.
Note: The last 5 years earns income nearly as much as the previous 20, one reason that a ‘retirement glide path’ is such a bad idea, if you have a dividend re-investment Snowball. If your Snowball is TR it might be a very good idea.
Using the 4% rule, the retirement income would be £12,270.00
Diversification.
Currently the SNOWBALL only invests in Investment Trusts as many currently trade at discount to NAV so the yield is enhanced. The Trusts currently held are from the Watch List updated most Saturdays although as the fcast income is ahead of the plan the SNOWBALL has bought some Trusts with a lower yield as a holding outside from the Renewable sector.
IF the price rises and the yields fall, the buying yield is still locked in but the earned dividends could be re-invested into ETF’s but that problem, as there are usually unloved sectors of the market, is not in the foreseeable future.
Have you ever thought about including a little bit more than just your articles? I mean, what you say is fundamental and everything. But imagine if you added some great images or video clips to give your posts more, “pop”! Your content is excellent but with pics and videos, this site could certainly be one of the greatest in its niche. Wonderful blog!
Tks for taking the time to post a reply. Investing for anyone’s retirement is a very serious endeavour as their Snowball has to outlive them to be worth the effort. Personally I’m not a fan of videos as the world is a wash with them.
The Market’s Panic Is Our Payday: 5 Cheap CEFs Yielding Up to 12.9%
Brett Owens, Chief Investment Strategist Updated: April 10, 2026
We contrarians love a good panic. Dividends are on sale!
The closed-end fund (CEF) aisle is where we do our best bargain shopping. Wall Street ignores CEFs, creating obscurity that we feast on. Discounts, mispricings and high yields are here.
Why the bargains? CEFs routinely go on sale. Thanks to their low profiles, supply and demand imbalances routinely disconnect a CEF’s price from its underlying assets.
When the value swings heavily in our favor, we buy.
And we have some dandy discounts now, with some big divvies attached! These five yields have soared to levels between 6.3% and 12.9%.
Plus, they are trading at discounts up to 12%. Which means we can buy these assets for as little as 88 cents on the dollar.
General American Investors (GAM)
Distribution Rate: 10.8%
General stock-market volatility is likely to draw out some of that inefficiency I just mentioned, so let’s start with a couple broader-market funds.
General American Investors (GAM), for instance, is a large-cap growth CEF that has more than a quarter of its assets invested in the banged-up tech sector, as well as double-digit exposure to the reeling financial and consumer discretionary sectors. Top holdings such as Alphabet (GOOG), Microsoft (MSFT), and Berkshire Hathaway (BRK.A) have been down to downright dreadful so far in 2026.
While it targets growthier stocks, GAM is technically a “large blend” fund, so we can horse-race it against the S&P 500—and the fund’s managers aren’t afraid to, either. Here’s a look at the fund’s performance versus the venerable index through the end of 2025:
Consider this: Only about 10% of large-cap mutual fund managers have been able to beat the index over the trailing 15 years. GAM boasts a performance edge over the past half-century. That’s an enviable track record.
The real draw of General American Investors, though, is how we receive those returns. An S&P 500 fund today will only deliver a little more than 1% of its annual performance in the form of dividends; however, GAM’s distributions—which admittedly are taxed somewhat differently because of their makeup—would deliver closer to 11% based on today’s distribution rate.
But this is where we need to be careful about valuation. Yes, GAM currently trades at a discount of nearly 12% to its net asset value (NAV). In many cases, that would represent a screaming bargain—but over the past five years, GAM, on average, has traded at a 15% discount. So it’s a nominal deal, but a relative premium.
Liberty All-Star Equity Fund (USA)
Distribution Rate: 12.9%
A stock CEF with far better relative value is Liberty All-Star Equity Fund (USA)—the first of two 12%-plus yielders on my radar.
This is another “blend” fund, but unlike GAM, it tilts toward value. Its roughly 140 stock picks have been selected by five teams of managers—three value-oriented and two growth-oriented, reflecting its typical 60/40 value/growth split.
The top holdings include many of the blue chips names every large-cap fund seems forced to hold—Nvidia (NVDA), Alphabet, Microsoft—but it has also elevated names such as Capital One (COF), Charles Schwab (SCHW) and Fresenius Medical Care (FMS).
Like with GAM, the bulk of USA’s returns come from its massive distribution. Performance hasn’t been as good, but over the long term, Liberty All-Star Equity has been pretty competitive with the S&P 500. A modest amount of debt leverage (where the fund borrows money to invest even more in its pick) has generally led to amplified gains in up markets, but deeper dips in down markets.
But USA’s chart has gotten really interesting of late.
This Is a Big Deviation From Liberty All-Star Equity’s Norm
For a few months in the back half of 2025, USA seemed to completely disconnect from the market in a bout of severe underperformance. But part of that was an implosion in its valuation. USA has long traded roughly in line with its net asset value, but it’s currently trading at a 10% discount to NAV—about as big a sale as shares have offered in the past five years.
Calamos Strategic Total Return Fund (CSQ)
Distribution Rate: 8.4%
Let’s start to shift toward fixed income with the Calamos Strategic Total Return Fund (CSQ): a straightforward do-it-all CEF that owns both stocks and bonds.
Specifically, CSQ management is tasked with investing at least 50% of its assets in equities, and the rest in “convertibles and fixed-income securities deemed beneficial during periods of high volatility.”
But despite the current volatility, CSQ is plenty aggressive right now, featuring a roughly 65/35 blend of stocks and bonds. The equity side is about 115 stocks wide, concentrated in blue chips like Nvidia (NVDA), Apple (AAPL), and Eli Lilly (LLY). On the debt side, its 500-plus holdings include convertibles, corporate bonds, bank loans, and other fixed-income instruments.
It’s difficult to provide a long-term comparison against similar ETFs. That’s because most of the players in that space are global (read: U.S. and international) funds—like the iShares Core 60/40 Balanced Allocation ETF (AOR) illustrated below—while CSQ’s assets are virtually 100% U.S.-based. And historically speaking, domestic funds have a significant performance edge.
But long-term, CSQ’s stock-bond portfolio has been enough to even beat the all-stock S&P 500. That’s in part because CSQ’s liberal use of leverage, currently 30% as I write this, has helped super-charge bull-market returns.
But There Is a Tradeoff
“Balanced” strategies are expected to have lower volatility than an all-stock portfolio because of the fixed-income holdings. CSQ, however, is a much wilder ride than the S&P 500, let alone plain-vanilla allocation funds.
On the plus side, Calamos Total Return prioritizes a consistent monthly distribution—indeed, the payout has changed just five times since 2011, and all of those changes (including the most recent one, in 2026) were raises.
But perhaps the biggest deal is the big deal we’re getting on CSQ right now. The fund typically trades about 1% to 2% below its net asset value (NAV). Today? Its 10% discount means we’re paying 90 cents on the dollar for this broad portfolio.
BlackRock Muniholdings (MHD)
Distribution Rate: 6.3%
We’re getting a similar discount from a much different portfolio in the BlackRock MuniHoldings (MHD), which owns about 900 tax-advantaged municipal bonds.
About the only places we’re getting a 6%-yield from ETF-land is junk funds and emerging markets strategies. But here, we’re getting fat monthly checks from high-quality municipal debt connected to transportation, utilities, health, housing, school districts, and more. Some 80% of assets are investment-grade, and the majority of that is in bonds rated AA or above.
By the way, that yield is even better than the headline figure indicates. Remember: Muni income is exempt from federal taxation, and sometimes state and local depending on where the bondholder resides. MHD’s distribution isn’t always entirely made up of tax-exempt income, but off the cuff, someone in the highest (37%) tax bracket who also pays NIIT (3.8%) would likely need a yield of around 8.5% from taxable bonds to get the same amount of take-home income.
This isn’t necessarily a defensive income haven, however. The bulk of MHD’s holdings are also on the very long end of the maturity spectrum, with 70% of assets invested in bonds that mature in 20 years or more. Tack on a moderate amount of debt leverage, and we get a CEF that can really take flight—or careen into the ground. It all depends on the environment for munis.
It’s Better Than a Muni Index Long-Term, But Its Slumps Can Be Significant
Unsurprisingly, it pays to pay attention to relative valuation. On that front, MuniHoldings’ almost 11% discount to NAV is nice, but it’s not very wide compared to its five-year average discounts of about 9%.
There’s also the open question of how the fund fares without its longtime helmsman. Walter O’Connor, who worked in municipal bonds for four decades and managed MuniHoldings for roughly half that time, stepped down in March 2026. He’s succeeded by five managers that joined between 2022 and 2023.
Nuveen Floating Rate Income Fund (JFR)
Distribution Rate: 12.8%
Another monthly-paying bond CEF, Nuveen Floating Rate Income Fund (JFR), is an extremely “junky” portfolio of about 425 corporate floating-rate bonds. Only a little more than 10% of assets are allocated to investment-grade bonds, and those are on the bottom tier of BBB. Another quarter is in junk’s top drawer (BB), and the biggest slice of the pie (about 50%) is in B-rated debt.
Between that and heavy leverage of nearly 40% as I write this, we’re looking at a bond fund that swings big and yields big.
Floating-rate bonds feature variable interest rates that adjust periodically based off a benchmark rate, so they’re generally less productive in declining-rate environments, but they offer protection against rising rates. Rates still seem likelier to head lower than higher over the next year or so, but that’s not the relationship I’m most interested in.
Near the end of 2024, I warned that JFR was trading near the historical high end of its price spectrum. My chart at the time:
That thin discount yet again played out poorly for JFR.
But the Tables Are Turning in New Money’s Favor
Nuveen’s floating-rate fund now trades for a 12% discount, so we’re getting these bonds at 88 cents on the dollar. That’s a good deal cheaper than the fund’s five-year average discount of about 7%.
2026 Is a Mess. My Favorite 11% Dividend Can Help You Clean Up.
But if I’m going to take a swing on a double-digit yield, I’d prefer to do it on a fund that won’t be swimming upstream against the Fed.
Right now, one of my favorite home-run dividendsis a heavily diversified, brilliantly built bond portfolio that yields 11% but is also set up for stock-like gains.
This fund checks off just about every income box I can think of:
It pays a whopping 11% in annual income!
It has increased its dividend over time!
It doles out special dividends on the regular!
And it pays its dividends each and every month!
On top of that, Morningstar previously named this fund’s manager a Fixed Income Manager of the Year. He’s been inducted into the Fixed Income Analysts Society Hall of Fame, too.
That’s about as good a resume as we’ll find, and his fund will pay us $1,100 for every $10K we invest.
Berkshire Hathaway (NYSE: BRK-B) maintains a 9.32% stake in Coca-Cola. The holding company itself pays no dividend, preferring to reinvest earnings and buy back stock, yet generates significant dividend income across its equity portfolio.
How Much Buffett Is Collecting From Coca-Cola
Berkshire Hathaway owns approximately 400 million shares of Coca-Cola. With Coca-Cola paying an annual dividend of $2.04 per share, that stake generates roughly:
400,000,000 shares × $2.04 = $816 million per year
That breaks down to about $204 million every quarter flowing from Coca-Cola to Berkshire.
For a single stock position, that level of income is extraordinary. Coca-Cola has effectively become a steady cash-producing asset inside Berkshire’s portfolio, sending more than three-quarters of a billion dollars annually to the conglomerate without requiring Buffett to sell a single share.
The Power of Yield on Cost
Buffett’s long-term investment approach with Coca-Cola demonstrates the compounding power of dividend growth over decades. The stock’s market value has multiplied many times over, while the dividend growth illustrates the compounding machine Buffett built through patient capital allocation.
Coca-Cola has raised its dividend for 63 consecutive years, earning Dividend King status. The most recent increase came in 2025, when the quarterly payout rose 5.2% from $0.485 to $0.51 per share. Over the past five years, the dividend has climbed from $1.60 in 2019 to $2.04 in 2025 – a 27.5% cumulative increase.
The SNOWBALL pays no dividend, preferring to reinvest earnings and buy back stock, yet generates significant dividend income across its equity portfolio.
If you think that you know better than W.B. and Benjamin Graham. GL
If you look at the chart of CTY, the long term direction is up, with inflation it will always be so. The market downturns are shown, which you have to sit thru. Better if you can add cash to the Snowball but for this example it’s only the earned dividends that are re-invested.
Looking at the chart and especially during the covid crash, you will see the share price follows the NAV of its constituent holdings. Whilst unpleasant, out of adversity comes opportunity.
Trading tip: watch the NAV not the price.
You decide to stick to your plan and simply trade the adversity and re-invest your dividends, therefore earning more dividends every year to either re-invest or to use in your retirement.
When the price is high and therefore the yield is lower, you could re-invest the dividends in the higher yielding shares in your Snowball.
The example share used is CTY which is a Dividend Hero and therefore one of the safest shares in the Investment Trust universe. CTY has reserves to pay their dividends in times of extreme market stress, which they have had to use three times in their long history but no dividend is entirely ‘safe’.
You did not have to take a big gamble with your hard earned, just to be in the right shares and do nothing.
The current yields maybe too low to include in your Snowball, unless you pair trade it with a higher yielder and still earn a blended yield of around 7%
Before we go back to the future and look at CTY during the covid crash, looking at the return on capital, investing is going to get a lot more difficult, maybe that could explain the latest interest in buying shares that pay a dividend as that may make up most of any returns.
The dividend was 19p, so when the price was 440p the yield was 4.3%.
After the price fell to 300p the yield was 6.3%, without the benefit of hindsight you had no way of knowing if the price was going to continue to fall but you could have bought the yield, as the intention was to hold forever.
The current dividend has gently risen to 21.6p, a yield on buying price of 7%, which should continue to rise as long as you hold the share.
You would have also achieved the Holy Grail of Investing, in that you could take out your stake, invest in another high yielder and continue to earn income on a share that sits in your Snowball at zero, zilch, cost.
A picture conveys a thousand words, the chart shows what turned out to be a blow out top and captures the market retrace.
The Trust owns numerous Investment Trusts that pay a dividend, so diversification away from Renewables.
The current yield is 6% and because the yield is one of the safest in the market it normally trades at a small premium, also the spread can widen.
Although a boring Trust, as traded volumes are low, it still captured a lot of last year’s price action and rose 29%, although the intention is to hold forever you could have taken out your profit and invested in another higher yielder in your Snowball.
Hey this is kinda of off topic but I was wanting to know if blogs use WYSIWYG editors or if you have to manually code with HTML. I’m starting a blog soon but have no coding expertise so I wanted to get guidance from someone with experience. Any help would be greatly appreciated!
No coding required, if you can copy and paste you are good to go.
