Closed End Funds and the Yield Trap

Jason Zweig warns investors against chasing high yields offered by some closed end funds in the column High Yields Aren’t Always a Good Thing. Problem number one arises from the fact that the yields posted by the funds can include both income and return of capital.


Case Study: Anticipating Higher Interest Rates

To preserve wealth and generate some income, Jim moved a healthy portion of his portfolio to Long Term Treasury Bonds. However, the improving economy combined with the Fed’s massive monetary response to the financial crisis has Jim concerned about the potential for a rising interest rate environment within the next 12 to 18 months.