Closed-End Funds Offer the Best Bargains

One caveat is that most closed-end funds, including Clough Global Equity, borrow against their holdings. If interest rates were to skyrocket, that would certainly squeeze investment performance and dividends. On the other hand, if the market were to tank, the chances of a further rise in interest rates would be minimal.

Clough Global Equity is a diversified and well-run fund. Its top holdings range from reinsurance companies such as Partner Re and Monpelier Re (MRH Quote) to Google(GOOG Quote), News Corp. (NWS Quote) and Japan's Daiwa Securities.

To put it bluntly, the risks of investing in this market right now surely have to outweigh the potential rewards. Global stock markets are not cheap. This week's fall shaves a minuscule fraction off the massive price inflation we've seen in the past nine months. Closed-end funds can offer a discount to net asset value, but they are not without risks of their own. Sometimes the best investment advice is the dullest: Keep your powder dry.