One of his favorite five for 2007 is Apollo Investment (AINV), a lender to midsize companies. Recently trading a bit above 23, it yields about 9% and is expected to boost revenue 33% this year.

For a "Chindia" play (China plus India), he likes Diana Shipping (DSX). Priced at around 17 and yielding 9.45%, Diana is a way to leverage on the whole emerging-market theme surrounding the pan-Asian continent.

For a broad-market component, Perry favors the S&P 500 Covered Call Fund (BEP). With a 10.7% dividend yield, it returned 29% last year.

Perry expects specialty finance to perform well; his top choice there is Deerfield Triarc Capital (DFR). This real-estate investment trust trades below 17, and is a 10% yielder.

Perry believes convertible securities will beat most other assets in 2007. Here he likes Advent/Claymore Enhanced Growth & Income Fund (LCM), which is trading at a slight discount to its net asset value while producing a dividend yield exceeding 8%.