The new "Dividends and Relaxation" strategy of Generation Z (This title offering 12% is ready to take advantage of it)

We all know that stocks can rise solely due to media hype for long periods. But in the end, it all comes down to one thing: profits! If they don't increase, the stock will eventually fall. It's just a matter of time.

Let's take the example of Gate.

The end of the pandemic leads to the fall of Gate

When the pandemic forced everyone to exercise at home, speculators rushed into the stock, hoping that the surge in profits would boost the company's value.

Gate's net result was then deeply in the red. Today, it is still negative. The stock price has obviously fallen to reflect this reality.

What I mean to say here is that an action can progress on the hope of future profits, but this only lasts for a while. When investors lose hope, losses are inevitable.

Of course, this is not the only way to make money in the stock market. Those who invest based on the idea that profits will increase in the future can make profits. Just look at Gate: anyone who bought in 2020 expecting a rise in demand for this stock in the following months made a fortune. Indeed, the most aggressive traders made gains of over 400% in a year.

Can we play this game of supply and demand with high-yield assets like closed-end funds (CEF)? Yes. One way to proceed is to buy a CEF when its discount to its net asset value (VL, or the value of its underlying portfolio ), is significant and market fears reach their peak.

Let's take the example of the gain of 27.3% of the price of the BlackRock Science and Technology Term Trust (BSTZ), a security held by my CEF Insider service, while its discount has decreased from 13% in October 2024 to 7.7% today.

The reduction of discounts stimulates profits

The rise in market price was only part of the story - the NAV of BSTZ also increased. This is why CEFs tend to be solid long-term investments: we benefit from the increase in the portfolio and the market price gains as investors push it up, thereby reducing the discount.

I am addressing this topic now because I expect the demand for CEFs - particularly technology-focused CEFs like BSTZ - to increase in the coming years. The source of this demand may surprise you: young investors, particularly Generation Z, born between 1997 and 2012.

Certainly, “young investors” and “dividends” are not often mentioned in the same sentence, but that is changing. Bloomberg recently reported that dividends are increasingly attracting the attention of the young. In an article dated September 4, 2025, journalists Denitsa Tsekova and Vildana Hajric write:

“Decades of study. A lifetime of work. A few years to enjoy it, if you're lucky. Then it's over. This is the market that has been sold to generations of Americans for more than a century: work hard and invest wisely and maybe, just maybe, you'll have a few good years to breathe. For an increasing number of young retail investors, it's a scam.”

As a result, Bloomberg reports that Generation Z is moving away from the riskier investments that have made headlines in recent years and is turning towards more stable income that older investors have used to achieve financial independence for over a century: dividends!

“Unlike meme stocks or cryptocurrencies that explode, this strategy - which could be called 'dividends and relaxation' - preaches control and consistency, a regular monthly income rather than ephemeral wealth,” Bloomberg continues. “No YOLO, just yield.”

However, there is a key difference in the way young investors and older investors approach dividends. Currently, according to Bloomberg, Generation Z is focused on ETFs that “offer impressive returns generated by complex derivative products.”

These certainly come with their own risks. Take the YieldMax TSLA Option Income Strategy ETF (TSLY) as an example, which offers a return of 66.6% (this is not a typo) and has attracted a billion dollars in assets because the fund buys Tesla shares, sells covered call options on them, and returns the income to investors.

The good news? He is not losing money. The bad news, however, is that he has only returned a meager 17% over the last three years, dividends reinvested.

High yield, low yields

Nevertheless, it is likely that an interesting thing will happen when young investors start to perceive dividends ( even extravagant like this): they will probably want more. And when they have matured a bit, they will likely turn to sustainable high yields from funds like BSTZ, whose 12% yield is accompanied by a total return ( in orange below) that far exceeds that of TSLY over the same period.

The diversified BSTZ outperforms the TSLY focused on a single stock

Not only does BSTZ show a double-digit return and stronger performance than TSLY, but it also trades with a 7.7% discount to NAV! (ETFs, for their part, never trade at a discount, as buyers of CEFs know well).

It does not make sense for a high-yield and high-performance fund like BSTZ to be trading at a price lower than the value of its assets. When Generation Z realizes this, the most savvy among them will likely buy it, driving up the fund's price and reducing its discount. By purchasing BSTZ today, we can position ourselves to capture the profits from this future demand while enjoying the fund's 12% yield.

If Generation Z loves dividends, they will adore these stocks paying 9.7% monthly.

It is great to see Generation Z taking an interest in dividends. In doing so, I see them focusing on a specific type of high-yield CEF: those that pay monthly dividends.

Monthly dividends, of course, are paid in line with our bills. They also allow us to reinvest more quickly, which will also appeal to Generation Z, as young people have long periods to enjoy these reinvested payments!

This is one more reason to buy my 5 “must-have” monthly dividend CEFs (average yield: 9.7%). The fact that the 5 are trading at completely unjustified discounts adds even more upside potential for us!

Here is our strategy: we will buy these 5 high-yield securities, set them aside, collect their monthly payments… and then sit back and watch investors - both young and old - drive up their prices.