Investors Hate This Market (and They're Dumping This Great 9% Payer)

Longitudinal survey data show rising unhappiness and a drop in “very happy” responses that, together with persistently weak consumer-confidence readings from the University of Michigan and the OECD, indicate a lower baseline for sentiment despite strong macro fundamentals (low unemployment, rising incomes/wealth). The piece argues this chronic pessimism has degraded the reliability of survey‑driven market indicators and pushed risk‑averse investors to widen discounts on closed‑end funds, creating valuation dislocations. Citing Liberty All‑Star Growth Fund (ASG) — which the author notes has delivered a ~10.2% annualized return and pays about a 9% dividend while trading at a materially deeper discount to NAV than its historical norm — the article frames CEFs (including a basket of five monthly payers averaging ~9.3% yield) as contrarian income opportunities to buy while sentiment remains unusually gloomy.

Analysis

Longitudinal social-data in the article shows a structurally higher share of Americans reporting unhappiness (a new high in 2022) while “very happy” responses have dropped to a new low, and consumer-confidence gauges from the University of Michigan and the OECD remain below pandemic-era levels despite historically low unemployment and rising incomes and wealth. The piece argues this disconnect means survey-driven sentiment metrics (the article cites CNN’s Fear & Greed Index) have a lower baseline and are less reliable as sell/ buy signals because investors now register negative attitudes at lower objective stress levels.

The market consequence highlighted is a sentiment-driven widening of closed-end fund (CEF) discounts: the Liberty All-Star Growth Fund (ASG) is cited as trading at a discount in 2025 below 10% versus a last-decade average discount of 2.2%, even though ASG has delivered a 10.2% annualized return and currently yields about 9% (its payout is NAV-linked). The author promotes a basket of five monthly-paying CEFs averaging a 9.3% yield (60 checks per year) as contrarian income plays that can provide cash while investors await discount normalization.

This opportunity is explicitly conditional on a mean-reversion of sentiment: if risk aversion eases, discounts should compress and total returns would benefit, but the article also implicitly warns that persistent pessimism could keep discounts wide and require patience since dividends are tied to NAV movements and can fluctuate.

Key Decisions for Investors

• Consider selectively accumulating discounted monthly-pay CEFs such as ASG to lock in high current yields (around 9% for ASG; ~9.3% for the five-fund basket) while keeping position sizes measured,
• Track CEF discounts to NAV and fund-level metrics (dividend sustainability, NAV performance and holdings like AAPL or OLLI) and add incrementally on meaningful discount widening rather than market-timing sentiment indicators,
• Limit downside risk by sizing positions and using portfolio-level hedges or stop rules because the article shows sentiment-driven discounts can persist even when fundamentals (employment, incomes) look strong,
• Monitor consumer-confidence series (University of Michigan, OECD) and any shift in headline sentiment indicators as triggers to trim or add exposure since the investment case depends on discount mean reversion