Markets
PCN

Forget Index Funds: Buy This for 316% Gains, 7% Dividends

By Michael Foster

ItaEURtms a line youaEURtmve no doubt heard before. It goes like this: aEURoeThe market is too efficient to beat, so you may as well just park your cash in a low-cost index fund and call it a day.aEUR

Nonsense! The truly ridiculous thing is, this myth is proven wrong every dayaEUR"but investors just canaEURtmt quit it. And itaEURtms costing them triple-digit returns (and 7%+ dividends) that could leave them well short of what they need to retire.

For proof that this market is far from efficient, just look at the one-day 22% drop in shares of Beyond Meat (BYND). That came after the company beat revenue expectations and its profits were twice what the market expected.

Markets get even less efficient (and easier for us to tap for 7%+ dividends and market-crushing upside) when we go beyond stocks, to areas like preferred stocks and corporate bonds.

There, human managers have the edge, and for them, crushing the benchmarks is a piece of cake. Take PIMCOaEURtms Corporate & Income Strategy (PCN), a closed-end fund (CEF) from one of the biggest CEF managers in the space.

Off the bat, PCN gives us a generous 7.2% in dividends, but thereaEURtms more: it racked up a 316% return in the last decade, crushing not only corporate-bond funds like the Vanguard Total Bond Market ETF (BND) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK), but the stock market itself:

Beating All the Indexes aEUR

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

PCN BND JNK

Other Topics

Stocks

Latest Markets Videos