I’m trying to wrap my head around closed end funds. MAIN gives a 6.98% payout and ARCC gives a 10% payout. What are the drawbacks on this. I rarely hear CEF’s mentioned anywhere. I’m 45 y.o. and am considering making these part of my IRA portfolio
There are 2 drawbacks I can think of
1- Missed opportunities on growth in the market
2- From what I understand holding them in a taxable acct triggers short term capital gains tax
That being said, a consistent 9% yield in a tax advantaged account year after year seems like a win right? What am I missing?
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