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Forbes
04-07-2025
- Business
- Forbes
This Lazy Take On US Debt Could Cause You To Miss A 14% Dividend
United States fifty dollar bill with the United States Capitol building close up Well, that didn't last long. A few months ago, all we heard from the mainstream media is that the 'sell America' trend was going to stick around for a long time. Nowadays, we're still hearing that. But one corner of the market—closed-end funds (CEFs)—is telling us something interesting: That investors are starting to turn their attention back to the US. That's given us an opportunity to front-run this quiet shift now, while it's still early, with some high-yield CEFs trading at attractive discounts. In a second, I'll walk you through the signal we're getting from two of the biggest US-focused CEFs—one holding stocks, the other corporate bonds. First, though, let's talk about what the real data says about one of the biggest fears that's been driving the so-called 'sell America' theme—US debt. US Debt Ratio Current This chart shows how much US households pay to manage their debt, as a percentage of disposable income. It's the main evidence supporting the argument that fears about US economic stability are warranted. To be fair, this chart does show a jump—about 10% in the last three years. In other words, yes, Americans' debt costs are higher than they were in 2022. That's a sure sign the US consumer is tapped out, right? If this all sounds familiar, it's because it's the same story the press pushed in 2022, with headlines like 'Consumer Debt Surges at Fastest Pace in 15 Years.' Three years later, the US economy remains strong. So maybe it's going to finally falter now? That's what the Wall Street Journal has been saying. In March, it published a story titled, 'Consumers Keep Bailing Out the Economy. Now They Might Be Maxed Out,' and another headlined: 'Recession Fears Stoke Concerns Americans Are Overstretched.' Now let's look at a chart that starts to dispel this fear and tell us the real story here. US Debt Ratio Historic Household debt payments definitely rose from their all-time low in 2021. Now they've leveled off at around 5.5% of disposable income. That's about where they were in the early 2010s. Today's level is also far below the average in the 1980s, 1990s and 2000s. US Debt Not The Problem… In other words, Americans are not maxed out. In fact, their household-debt levels are quite low. According to IMF data, US households are less indebted than those in much of Europe and Asia, as well as Australia and Canada, both of which are places thought to be fiscally responsible. Household Debt, Global At current levels of American disposable income (which is among the highest in the world) and debt levels (one of the lowest), the average US household is paying about $282 per month on its debt. That's hardly a lot of money for most people! It's also worth pointing out that the average American family's net worth had risen to $192,700 by 2022 (when the Federal Reserve did its latest survey), fully recovering from the Great Recession. There's a direct line between this financial improvement and the S&P 500's world-beating long-term performance: SPY Total Returns Which brings me back to that indication CEFs are giving us that investors may finally be catching on to the strength of the US consumer. To get at that, let's look at a major corporate-bond CEF, the PIMCO Dynamic Income Fund (PDI), and the Nuveen S&P 500 Dynamic Overwrite Fund (SPXX). As SPXX's name says, it holds the S&P 500, but it also sells call options—a low-risk way to support its dividend. In a June 9 article on our Contrarian Outlook website, we talked about how SPXX and PDI work together to give an investor a nicely diversified 'mini-portfolio' of stocks and bonds. We also identified an international fund, the Clough Global Opportunities Fund (GLO), as a less-effective way to diversify. With CEFs, we have two measures of performance: total return based on net asset value (NAV, or the value of a fund's underlying portfolio) and total return based on market price. These can be different, with NAV a better measure of the fund's portfolio management and market price a measure of the fund's overall performance, subject to investor whim. When we look at the total NAV returns of the US-focused funds in the past year (SPXX, in orange below, and PDI, in blue), we see that they exceed that of the more global fund, GLO (in purple), by a fair margin: US Outperforms But if we pivot away from NAV for a moment and look at GLO's total price return, we see that the global fund, GLO, has a far better performance, returning 15% (in orange below), far higher than the 6.4% return on its NAV (in purple) and indeed ahead of SPXX. GLO Total Returns Here's what's really happening: Market demand for this fund is outpacing the fundamentals by a lot. That's causing GLO's discount to NAV to narrow (it's now 11.7%). Over time, investors will likely realize that fundamentals are underperforming market demand here and that, when compared to SPXX's 7.6% yield and PDI's 14% payout, both funds are better contenders than GLO to deliver strong total returns alongside a rotation back into America. And that means there's still time to profit from these two funds and avoid the growing possibility of underperforming by holding GLO, as that fund's market-price gains run ahead of its fundamentals, potentially setting it up for a fall. In short, the 'pivot back to America' trade is wide open in CEF-land, where big (and often monthly paid) dividends are also on the table—if you stick to the data and ignore media fearmongering. Michael Foster is the Lead Research Analyst for Contrarian Outlook. For more great income ideas, click here for our latest report 'Indestructible Income: 5 Bargain Funds with Steady 10% Dividends.' Disclosure: none
Fox News
03-07-2025
- Politics
- Fox News
Trump chose country over comfort — just like the Founding Fathers once did
For years now, the far-Left has been escalating its attacks against our Founding Fathers, the 4th of July, and the American flag. They have literally called for the canceling of all three. But…as long as we continue to celebrate our most significant and cherished holiday, the far-Left is more than happy to exploit it. That said, they have scheduled their second "No Kings" protest for the 4th of July. These – mostly paid – anti-ICE anarchists have three goals: to smear President Donald Trump and his policies; to desecrate our Independence Day; and to get as much free publicity from their allies in the mainstream media as possible. Ironically if these protesters knew American history, thought for themselves, or actually cared about the welfare of their fellow Americans, they would quickly realize that Trump is about as far removed from a "king" as possible and, in fact, has a great deal in common with our Founding Fathers. I strongly believe our Founding Fathers would have embraced Trump as one of their own. Why? Because for most certainly the last ten years of his life, he has exhibited the same beliefs as them; the same courage as them; the same vision as them; and literally put his life on the line, like them. I know a bit about this subject because three years ago this 4th of July, I authored a book titled: "The 56 – Liberty Lessons from those who risked all to sign The Declaration of Independence." The only reason I wrote the book was to showcase those men in the heroic light they deserve while outlining a plan on how to protect them, the 4th of July, and the American flag from cancellation. The anarchist protest on the 4th is titled: "No Kings 2.0 – Independence Without Tyranny." The flyer then goes on to say: "This 4th of July we're reclaiming America's promise. Freedom for all. Justice for all. NO KINGS." Next, we come to the section where the organizers demonstrate that they are either paid propagandists with no principles; so far deep in the power-hungry socialist silo that they can no longer see reason or light; or just truly want to strip their fellow Americans of their rights and freedoms. The rest of the flyer reads: "What started as a local protest is now a national movement. This isn't about Left vs. Right – this is about the people vs. power unchecked. No more leaders above the law. No more silence when rights are stripped away. No more fear, manipulation, or false patriotism." Wow. Really? The only thing that I can think of which would excuse this purposeful twisting of reality is that the organizers and anarchists have somehow confused Joe Biden with Trump. "No more leaders above the law." Do they remember the United States under the draconian COVID edicts enacted by Biden and the power-hungry bureaucrats from just four short years ago? Jobs and livelihoods destroyed; schools closed; children uneducated and punished; forced masking; forced vaccinations; police, military, firefighters, doctors, nurses, and others fired for exercising their American right not to have a vaccination. If that wasn't the poster child for "No more silence when rights are stripped away", then I don't know what is. And yet, those on the Left organizing this latest "No Kings" protest were not only "silent" but many of them enabled that tyrannical destruction of jobs, education, and liberty. Talk about "manipulation." Talk about "fear." Potentially millions of Americans have not fully recovered from that rhetorical and real reign of terror. But of course, this protest has nothing to do with liberty, rights, or the welfare of the American people. It is almost entirely about smearing President Trump. But as they protest the president this 4th of July, I would like to educate them about the ironic facts their hate is shielding. Back in 1776, the vast majority of the wealthy either chose to side with the British Crown or remain silent. They did not want to risk their money nor their privilege. A number of the 56 men who signed their own death warrants by signing the Declaration of Independence were quite wealthy. They would have been considered billionaires today. So, what separated them from the wealthy of their time hiding in the shadows? Courage and a hatred of tyranny. When the Colonies reached that tipping point between freedom and tyranny, these men asked themselves the two most important questions of their lives: "If not me, who? If not now, when?" To be sure, tens of millions of Americans believe that in 2015, then-New York City businessman Trump asked himself those same two questions. He needed none of this. Trump had created an iconic global business empire and could have spent the rest of his life in peaceful luxury. And yet, like our Founding Fathers – he chose his nation instead. And because he did, he came within a few millimeters of losing his life last July. No. If the organizers and anarchists want to protest against "Kings" and unchecked abusive power, they might want to look into who is funding them or the past behavior of those they choose to give a free pass. Trump is the personification of our Founding Fathers and deserves to be recognized as such.
Economic Times
25-06-2025
- Business
- Economic Times
Vodafone Idea shares in focus after company denies report on Rs 84,000 crore govt relief
Vodafone Idea shares are set to remain in focus on Wednesday, June 25, after the company issued a clarification denying media reports suggesting the government is considering relief on its dues worth Rs 84,000 crore. ADVERTISEMENT The clarification comes after the BSE sought an explanation from the telecom company regarding a news article published on Tuesday, which claimed that Vodafone Idea shares had surged over 7% following reports of potential government relief. In a regulatory filing, Vodafone Idea stated that it has not received any communication from the government concerning the matter mentioned in the news report. 'As and when there is any development which requires disclosure, we will do the needful,' the company said. 'This is with reference to the news article appeared in Mainstream Media on 24 June 2025, titled 'Vodafone Idea shares jump over 7% on reports of Govt. considering relief on Rs.84,000 crore dues' and the consequent material price movement in the Scrip of the Company today i.e. on 24 June, 2025,' the company's regulatory filing the past one year, Vodafone Idea shares have declined sharply by 60.22%. On a year-to-date (YTD) basis, the stock is down 14.34%, while the six-month performance shows a drop of 8.03%. In the last three months, the stock has fallen by 6.40%. However, over the past one month, Vodafone Idea shares have managed to gain 1.4%. ADVERTISEMENT Also read: HDFC Bank unit HDB Financial Services' IPO opens today; GMP at 10%. Should you subscribe?On Tuesday, the shares of Vodafone Idea closed 4.9% higher at Rs 6.87 on Tuesday. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
