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Fair enough. I’m not trying to talk you or anyone else into an investment they aren’t comfortable with. I will note that ETF’s and mutual funds also require a buyer and seller, not just CEF’s.
The scarcity of buyers drives the managers of ETF’s and mutual funds into liquidating assets at exactly the time they may want to be buying. The manager of a CEF shrugs his shoulder’s and looks for bargains since he doesn’t have to meet a demand for redemptions. The inability to sell a CEF at a reasonable price near NAV is actually a pretty good signal that you probably shouldn’t be selling it anyway.
@plainolbill: I understand CEF’s are excellent trading vehicles because of the obvious inefficiencies that occur when retail investors rush in and out. But I’m a long term holder of the bond funds I purchased. If you get a good entry point and are in it for the income generated, it doesn’t matter if you get a z score approaching +3 as recently happened wth one of my funds. I shrug my shoulders knowing there isn’t a great likelyhood the discount will narrow further but I’m not in it for capital gains (though they are really nice as a bonus).
Dan Ivascyn, Jeff Gundlach, and Larry Fink manage my bond portfolio. They charge a bit for it but it’s absolutely been worth it.
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Not so with Mutual Funds, they don't trade like stocks or ETF's. You are transacting directly with the fund. Transactions with funds happen after the market closes(buying or selling) when a new net asset value is set(price). When there's lots of redemptions, your selling prices usually plunges, similar in that respect to prices on stocks and ETF's. Closed end funds trade like stocks.