Last week saw the Fed raise interest rates. Well, it was not to levels that would encourage me to rush down to my local bank and throw my money in an account. In fact interest rates are really so low that they do the opposite of encouraging savings.
Many times I hear of clients complaining that “there is no where to put our money to earn a positive return after inflation”.
I say that’s a ridiculous idea.
The search for a positive return often results in the never ending pursuit of stocks with sky high yields which invariably means higher risk. You could rush out and buy a closed end fund which either trades at a premium or a discount and get a “false” dividend every year (through the return of capital – which is a subject for another day).
You could buy one of the blue chip US stocks like Verizon or At&T or Microsoft which offer higher yields than a bank account (in my opinion they are safer than some banks!)
Or you could employ what I call a “synthetic yield strategy”.
Now before you all rush off and google this you have to accept that there are always risks to stock investments and not all dividends are “safe”. Even Wells Fargo was willing to forego a reputation of being a reliable dividend payer to preserve capital.
The synthetic yield enhancement strategy is the cornerstone of my coaching program and it has been used successfully by my clients to alter their financial picture.
This strategy can enhance the yield of stocks like Microsoft, Apple and others by up to 300% annually.
I am not one to argue with the pundits of long term investing. Buy and hold has its merits and definitely has proven to work over the long term.
But like I have said before what if they are now wrong? You cannot come back to try again. What if you just cannot generate enough positive cash flow from the dividends and capital gains? Do you even know how much money you are leaving on the table?
In the investment climate of today you need to stay on the pulse of your investments and this means that your income cycle should be less than 12 months. Unfortunately dividend stocks by themselves just don’t do this by themselves.
If you would like to know more about my coaching services and you would like to learn more about the synthetic yield enhancement strategy, you can message me through this page.
Be careful out there.