Unelected Governors – Value in Closed End Income

Unelected Governors – Value in Closed-End Income

By Julien B. Booth

October 13, 2016

I hope this notes finds you doing well. We have started our move to the new World HQ of Forest Capital (formerly Cannon Mills Exec. offices/Niblock Bldg.) in Concord, NC. Feel free to drop by. Map below.

There is a time and place for everything. We find ourselves in a time where the Federal Reserve Governors are dictating.

The ridiculous, on again, off again Federal Reserve is all that drives the current rate markets. Damn the economic data; as it continues to be largely disappointing. FYI – Econ. cycles have not been eliminated. We are well beyond the normal growth/expansionary duration.

The wonderful outcome of the endless Federal Reserve chatter: Closed end funds (SECONDARY market only) are once again a wonderful bargain; Tax-free yields exceed 4.5% and taxable yields are in excess of 7.0%+. With rates likely range bound…there is solid value here with great credit quality.

We are actively adding to our closed-end fund positions, especially tax-free municipal bonds.

As usual, thank you for investing with Forest Capital! For additional information on portfolio positioning, please contact Forest Capital directly at jbooth@forestcapital.net.