What do yall think of Dividend funds? Like John Hancock Tax-Advantage Dvd Incom Fd.

[BillSimmons]

What do yall think of Dividend funds? Closed-end like John Hancock Tax-Advantage Dvd Incom Fd. (HTD)

 

[safvan]

Good if the returns are better than the bank. Anything that has better returns than the bank is better

 

[BillSimmons]

Any main downsides to them?

 

[pboyles]

Any main downsides to them?

Yes you could lose all your money. This is the warning from their website.

Please keep in mind that mutual fund shares: Are not FDIC insured | May lose value | Come with no bank guarantee | Are not insured by any government agency

 

[BillSimmons]

Yes you could lose all your money. This is the warning from their website.

Please keep in mind that mutual fund shares: Are not FDIC insured | May lose value | Come with no bank guarantee | Are not insured by any government agency

That goes for all stocks/etfs/funds though, and its unlikely all the companies/holdings in the fund will go bankrupt on the same day.

As compared to regular stocks/etfs, are closed-end dividend funds any more risky?

 

[safvan]

Yes you could lose all your money. This is the warning from their website.

Please keep in mind that mutual fund shares: Are not FDIC insured | May lose value | Come with no bank guarantee | Are not insured by any government agency

Pboyles is correct. In addition to that Mutual funds are only allowed to buy and cannot go short when the markets go down badly.

So if you lock your money at the height of a bull market then chances are the correction phase would hurt you bad in mutual funds.

Good time to put in the money is during the start of a bull market and taking it out when things start to falter.

A simple approach is to follow the S&P index on WEEKLY charts or FTSE or whatever index you feel can give a sound picture of the overall economy. Once you start seeing a confirmed upward trend, put in the money. Pull out the money when the upward trend breaks.

So no long term investing here. Trends can take time to break on weekly charts.

My simple rule is. In a bull market invest from September to April and stay out in the summers. That is it. Keeps you out of headache most of the times.