This 8.5% Dividend Loves A Market Panic

Core Viewpoint - The current market volatility presents an opportunity for investors to buy into closed-end funds (CEFs) that offer high dividends, particularly those utilizing covered-call options to generate income [2][3][12]. Group 1: Market Conditions - Volatility has returned to the market, prompting a potential selloff, which is a typical cycle where stocks rise, followed by a selloff due to investor fear, and then recovery as "smart money" buys the dip [5][8]. - The recent disappointing jobs report has contributed to rising fears in the market, although job growth continues, indicating that the economy is not in a dire state [8][9]. - The CNN Fear and Greed index has shifted from extreme greed to a neutral stance, suggesting a cooling sentiment that may lead to a short-term selloff followed by recovery [10]. Group 2: Investment Opportunities - Three covered-call CEFs are highlighted as attractive investment options: Nuveen Dow 30 Dynamic Overwrite Fund (DIAX) with an 8.5% yield, Nuveen S&P 500 Dynamic Overwrite Fund (SPXX) with a 7.6% yield, and Nuveen NASDAQ 100 Dynamic Overwrite Fund (QQQX) also with an 8.5% yield [4][12]. - DIAX is particularly noted for its near-11% discount to net asset value (NAV), making it a compelling choice for investors looking to hedge against short-term volatility [13][15]. - The strategy of selling covered-call options allows these funds to generate income even in volatile markets, turning rising fear into cash for investors [12][14].