Don’t Make This Common Expat Investing Mistake!

Closed-end funds.

These are popular with dividend investors because of their ultra-high payouts. In fact, some closed-end funds offer starting yields of 15% — or more.

An investor could park $100,000 into some of these high yielders and instantly retire to beaches of Thailand or Mexico.

Or at least that’s what some people would have you believe…

In reality, these investments are almost always long-term losers. And here’s why you should avoid closed-end funds and covered call ETFs.

A Useful Analogy From George Lucas

George Lucas once did an interview where he explained the role of movie executives.

In it, Lucas used an analogy that the movie executives “bet” on a director. And this is like staking a gambler at a big casino. You’re entrusting your money with someone else. And while you can set some parameters, like telling the gambler they can only bet “Red” in roulette, your financial success ultimately comes down to how skilled the player is — and luck.

Closed-end funds and covered call ETFs offer enormous dividend yields because the people running these funds are trading options on the underlying assets.