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Recently, my wife and I went on a relaxing trip to the beach in Southern California. We turned off the news (mostly) for 4 days and just tried to unwind and breathe the clean ocean air and listen to the waves lap at the shore lulling us into a deep sleep each night. It was heavenly, and it appeared to me that the economy is humming along just fine in SoCal at least. People were out and about everywhere from Newport Beach to San Clemente. Restaurants were busy, the traffic was congested, and people were at the beach and staying in local hotels like it was Spring Break, yet barely March.
Meanwhile, and now back at home as I watch the ongoing war in Ukraine unfold and hear on the news about rising inflation and oil prices going through the roof, I am considering my financial future and wondering what to do. For example, I did observe while we were staying by the beach that gas prices were priced at $5.50 per gallon on average!
Fortunately, there are some relatively safe and defensive options available to increase future income without sacrificing invested capital. I am offering up 3 ideas in this article, two are income-generating CEFs, and one is a US Treasury Bond that currently pays over 7% interest. The three options include:
- Guggenheim Strategic Opportunities Fund (GOF)
- Calamos Long/Short Equity & Dynamic Income Trust Fund (CPZ)
- Series I Savings Bonds from Treasury Direct.
Yes, Mister Bond
While it is not yet “Time to Die” it is time to consider safer investments in your short-term buying horizon for long-term income including a bond fund. GOF is a Fixed Income – Taxable-Multi-Sector CEF offered by Guggenheim. The GOF portfolio consists of 77% fixed income, 13% equity strategy, and holds ~10% cash as of 12/31/21. The fund uses about 30% leverage and pays a monthly dividend of $0.1821, which equates to an approximately 11.5% annual yield at the current price of $18.85 as of market close on 3/4/22.
GOF is the surviving fund after the merger of former funds GGM (Guggenheim Credit Allocation Fund) and GPM (Guggenheim Enhanced Equity Income Fund) into GOF was completed in October 2021. You can read more about the post-merger GOF fund here. Other authors have also recently covered the fund in much more detail than I will here.
If you are interested in further research, consider the articles like this one from Alpha Gen …….