Great mutual fund tips Gabelli Dividend & Income Trust symbol GDV

Now that I have some time on my hands I am going to blog again on investing and mutual fund tips. Today I am going to point out the virtues of a fund that I bought a few weeks back. From the Gabelli web page their description is “The Gabelli Dividend & Income Trust, or the Fund, is a diversified, closed-end management investment company whose objective is to provide a high level of total return.” In plain English this is a closed end mutual fund. Closed end mutual funds are funds that trade like stocks and they have a fixed pool of money. Unlike a traditional mutual fund which have their total assets increase when people invest more money into them and decrease when people redeem their shares. In a traditional mutual fund a manager must constantly be wary of mass redemptions as well as getting too much money sometimes called mutual fund bloat where the manager cannot find good investments for the fund’s assets. A closed end fund does away with those problems.

So why do I like Gabelli Dividend & Income Trust? Lots of good reasons. This is a relatively low volatility fund with a handsome return. In the last 10 years this fund has produced 13.45% per year. Get that from your local credit union! This fund is diversified as of their last report there were 475 different holdings. More holdings equal less risk. This fund has a net asset value of $22.64 (today) and the last sale today on the New York Stock Exchange was $20.82 (I invested at $19.87 two weeks ago. I’ll discuss more in the future.) The net asset value is what the fund is worth if it were liquidated and everyone paid their portion. At $20.82 the fund is selling at a discount today. I would never buy a closed end fund if it were not selling at a discount. This fund has a handsome discount right now relative to historical norms. I also like this fund because the managers of the fund attempt to invest along Catholic / Christian principals. It pays an 11 cent per share dividend per month which is great for an old retiree like me.

I doubt you can buy Gabelli Dividend & Income Trust in your 401K. You may be able to buy it in your IRA if you can buy stocks or exchange traded funds.

Buying at $19.87 is something called “market timing” which I am going to discuss in a future blog.