BIF - Equity CEFs: Why CEFs Can Stay At Premiums/Discounts And Why It Doesn't Matter
This is one of the most talked about subjects I see regarding CEFs. What difference does it make whether I buy a fund that trades at a discount or at a premium? In the long run, they all seem to stay at roughly the same valuation for months if not years.
Fair enough. I see the logic in that deduction and its true that CEFs can often stay at their discounted or premium market prices for some time. But there's a reason for that and it has NOTHING to do with the fund at a