Posted by It’s easy to generate income when the stock market is going up. But, that is usually when I’m selling. In the past, I would always try to limit how much money I was getting from selling stocks. I didn’t want to have a big tax bill at the end of the year. It’s no fun having to pay thousands of dollars in taxes. Now that my investments are my only source of income, my thinking has changed. My tax bracket will be much lower without a job, so I should be able to let my stock picking talents run wild next year.
I am still researching closed end funds as a source of income. The CEF Connect website is the best I’ve found for screening closed end funds. Here you can screen for market cap., distribution rate, distribution frequency, expense ratio, NAV discount, and share price. Just to name a few. My criteria starts with a monthly distribution of 7% to 9% and a 1% to 1.5% expense ratio. The other option is to start with the investment strategy filter and look for only the funds that use the strategy that you prefer. Most people will be looking for a certain distribution rate. If you are looking for a large NAV discount, BlackRock Resources & Commdty:BCX is an energy CEF with an 12% discount that pays out 8% monthly. Not bad, if you think energy and natural resources are a good investment right now.