Despite the fact that the economy is not actually in a recession, many Americans believe that it is due to a phenomenon called “vibecession.” This sentiment can lead to investors making mistakes based on fear rather than data, potentially resulting in missed gains. The creator of the term “vibecession,” Kyla Scanlon, based her assessment on factors such as rental payment delays, which may have been influenced by the eviction moratorium enacted during the pandemic.
In 2024, the idea of a vibecession is resurfacing, but current data does not support this claim. Eviction fears are decreasing, unemployment rates are at historically low levels, and employee earnings are rising above the inflation rate. As a result, US stocks have been performing well, outperforming markets in other countries since 2022. Sectors such as semiconductors, media, and technology are experiencing significant growth, making US stocks an attractive investment option.
The Liberty All-Star Equity Fund (USA) is a closed-end fund (CEF) that is well-positioned to benefit from the current economic conditions in the US. Focusing on high-quality US companies with strong cash flows, USA pays a 9.7% dividend and trades at a 2.5% discount to its net asset value. With a track record of over 3,000% return since its founding in 1986, USA strategically rotates its portfolio to profit from stock market gains while paying sustainable dividends to investors.
USA’s approach of translating stock gains into dividends through systematic selling of shares allows investors to benefit from market gains without having to sell their shares. The fund’s dividend has increased by 80% in the last decade, demonstrating its sustainability despite concerns about its high yield. Additionally, there are other equity CEFs available that provide alternative ways to access US stocks and generate dividend income.
Overall, the current economic landscape in the US is favorable, with income growth exceeding inflation rates and strong performance in the stock market. Investors can take advantage of these trends by considering CEFs like USA, which offer the opportunity to profit from the market’s gains while receiving steady dividend income. By focusing on data-driven decisions rather than succumbing to fear-based narratives, investors can make informed choices that maximize their potential gains in the market.
