Most people have never heard of something I call the 893(C) account. In fact, 95% of Americans prefer to stash their cash in mutual funds, ETFs, and other investments.
That’s a huge mistake, especially if you want to earn 2x, 3x, and even 5x more income than those “typical investments.”
One of my favorite 893(C) investment involves “boring” municipal bonds.
Before you stop reading, let me explain HOW this boring investment could deliver huge tax-exempt income every month. Let me also explain how you can buy this investment at a markdown to market value.
Earning 2.5x more income than the S&P 500 is a real possibility.
Make that 3x when taxes are factored in.
Unlike S&P 500 dividends, the income is exempt from federal taxes. What’s more, the income is paid monthly.
Tax Free Income at a Markdown
It gets better. The high-yield, tax-exempt income can be bought at a markdown to the market price. Get a dollar’s worth of investment, but pay less than a dollar for it.
Few investments offer the opportunity to collect high-yield income and pay less than retail for it.
You can understand why 893(C ) investments are popular among the wealthiest investments: Buffett, Gates, Icahn, Ackman have all invested in these type of investments.
Though these 893(C) investments available to all investors, few exploit the opportunity.
They’re missing out on more than they realize.
The high-yield, tax-efficient 893(C ) investment to which I refer owns a portfolio of municipal bonds — over 100 issues. Quality is the guiding lantern. Nearly 50% of the portfolio is rated “A” or higher. The high rating ensures a low risk of default.
This 893(C ) investment pays a 5% income yield. But the income is tax-exempt. You would need a 7% yield to collect the equivalent taxable income.
The income and the investment that generates it are on sale.
This tax-exempt, high-yield 893(C) investment’s shares trade at 6.3% markdown to portfolio value. This same investment traded at a 7.5% markup last summer.
So why the discount today?
Since Trump’s presidential victory, investors have slavishly anticipated rising interest rates. The Federal Reserve has raised the level of anticipation. The Fed has raised its short-term target rate three times since December.
Fear as Motivator
Bond investors fear rising rates. Their fear has motivated them to sell bonds. Bond prices have fallen.
The fear and the selling are irrational.
Bond investors appear to ignore the fact that interest-rate increases, and the prospect of future increases, have failed to materialize.
Interest rates remain low. They show little inclination to move higher. Since long-term interest rates remain low, the recent sell-off in bonds is irrational.
As long as interest rates stay low (as I expect), bond prices will rise. The value of the 893(C) investment’s portfolio will also rise. The markdown will revert to a markup.
Smart investors should be ready to exploit the markdown.
You can seize an immediate opportunity to buy a quality tax-free income at a favorable markdown. Go here to access my research.
Many other opportunities to invest in 893(C) high-yield marked-down investments await. If you want to learn how to invest in this investment and other high-yield, marked-down investments, then join me at a free live webinar this week.
You’ll discover how to collect five times the income than the average dividend growth stock. You’ll also discover how to buy the 893(C) investments at 6% to 20% markdowns to market value.
Click here now to access this free event.