The current period reminds me of the early months of 2009, when "green shoots" were appearing in the economy and markets, but investors were still too scarred by the preceding plunge to get in, suggests Michael Foster, investment strategist and editor of CEF Investor.

But those who did buy then — around the bottom in early March 2009 — have done very well. We've got a similar opportunity now.

Lately, you've probably noticed various Fed members out making the media rounds, talking tough about the need for higher rates to beat inflation. Don't buy it. This "jawboning" is solely meant to keep investors and consumers on the sidelines so the Fed's rate hikes can do their job. Thing is, the job is already being done (and then some).

For one, recent consumer price index (CPI) and the producer price index (PPI) reports have come in much lower than expected. Shipping costs, too, have returned to pre-COVID-19 levels.

We've seen other costs fall quickly, too, like gas prices, which are still far below the pre-Ukraine War peak as Europe succeeds in storing enough energy for the winter. All of this is pointing to lower inflation ahead, a trend the Fed will have to start paying attention to.

Meantime, the market remains oblivious — sitting in deeply oversold territory as it prices in a hard landing caused by inflation and soaring rates. This disconnect is the source of our CEF profits. But I understand that many folks are still wary, so I've lined up three CEFs for you to consider, ranging from conservative to more aggressive.

Our more conservative pick is the Nuveen Dow 30 SM Dynamic Overwrite Fund (DIAX), which owns the large caps in the Dow 30 index. So you're getting strong firms that have weathered difficult markets in the past, such as UnitedHealth Group (UNH), McDonald's (MCD) and Visa (V).

That gives us a level of safety, as these companies have the strong balance sheets and revenues they need to face a recession. The other "downside limiter" is the fact that DIAX sells covered-call options. Using this strategy, it sells the option to buy its stocks at a fixed price in the future. If the stock hits that price, DIAX sells it to the option buyer and keeps the fee it charges for the option. If not, it keeps the stock and the fee.

This is a low-risk strategy that provides income DIAX adds to its payout, which yields 7.3% today. The fund gets further downside protection (and upside potential) from its 4.5% discount to net asset value (NAV, or the assets in its portfolio).

DIAX is one of the lowest-risk CEFs for stock exposure. But its covered-call strategy also limits your upside, as the fund will likely sell its holdings before they hit their full potential.

Our next CEF, the Liberty All-Star Growth Fund (USA) has outpaced the S&P 500 since the end of the 2008-2009 financial crisis. It holds large caps like Amazon (AMZN), Alphabet (GOOGL) and Berkshire Hathaway (BRK.B), plus a smattering of small- and midcap names, too.

That outperformance has resulted in strong dividends, as USA bought and sold its portfolio and handed the profits over as a high dividend (current yield: 9.7%).

In fact, USA has given shareholders steady payout increases, too. (The fund links its dividend to its portfolio performance, paying out 8% of its NAV per year. This gives it the flexibility to pick up oversold bargains when the opportunity arises).

USA does trade at a slight (3%) premium to NAV, but it's traded at premium for most of the last three years, and often higher ones. That leaves USA fairly valued in light of its high-quality portfolio and potential for bigger payouts as stocks recover.

For even more upside potential and bigger payouts, look to the 13.7%-yielding BlackRock Science and Technology Trust II (BSTZ).  With a massive 17.4% discount to NAV, BSTZ has priced in just about every disastrous outcome for the economy that you could imagine.

Its discount is now at levels unseen since the pandemic hit March 2020. There's little reason to think BSTZ should be as cheap now as it was in those dark days.

BSTZ focuses on tech, which also bodes well, as the sector that's the most beaten-down in a selloff (tech, in the case of 2022) is often the one that leads the recovery. It also benefits from its manager, BlackRock, the world's largest investment firm, with $10 trillion in assets.

BlackRock's size and deep connections in the tech sector give BSTZ's managers an unsurpassed level of insight into the stocks they buy. BSTZ is a prime example of why CEFs are so advantageous to investors. First, we're getting exposure to high-quality tech companies, and those companies are being picked by the best professionals in the business.

We're also getting access to BSTZ's extensive private equity investments, which are both unavailable to the general public and provide strong growth potential on their own. And, of course, there are the double-digit discounts and dividends on offer here.

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