Many retirees are stretching for yield and buying high-yield bonds and bond funds and dividend-paying stocks. The risk/reward ratio in the high-yield bond market isn't too good right now and investors may not be getting compensated for the risks they are taking. Dividend-paying stocks can also be a good income alternative depending on yourindividual risk tolerance.
Consistent cash flow can be obtained by selling covered calls against dividend paying equities. Remember, options aren't suitable for all investors. The main drawback to selling covered calls is that you are limiting the upside potential of your stock, by giving someone else the right to call it from you at the strike price on or before the expiration date. However,if cash flow is your primary objective, covered call writing might be a strategy worth considering.
Source: Market Watch
Related Articles:
- 6 Healthcare Stocks With Growing Dividends Yielding In Excess of 2%
- Why We Are Dividend Growth Investors
- 6 Dividend Growth Stocks With Very Little Debt
- What Determines A Dividend Stock's Yield
- Warren Buffett's Secret To 50% Returns
Get More Income Using This Creative Strategy
Posted by D4L | Thursday, July 10, 2014 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
Investors wanting to enjoy steady and consistent income should consider dividend aristocrats. In fact, even in these chaotic times, dividend...
-
A select group of monthly dividend stocks pays dividends at a rate of 10% or higher. Those are the ones on this list. Investors should be aw...
-
Higher dividend yields often imply that the underlying company paying the dividend has a higher risk profile. However, that's not always...
-
Dividends and diversification -- those two things can help you achieve a comfortable retirement when combined with the income you will recei...
-
It's hard to beat a sustainable, high-yield dividend paired with a beaten-down valuation. The best dividend stocks offer high yields and...
-
How high is too high when it comes to dividend stocks? Of course, every income investor wants as much yield as possible. However, they also ...
-
When hunting for discounted investments, one excellent starting point is to look for businesses with dividend yields trading above their fiv...
-
Strange but true: seniors fear death less than running out of money in retirement. And unfortunately, even retirees who have built a nest eg...
-
While there’s nothing quite as exciting as betting everything on a hot growth enterprise, prudent investors may want to consider the best di...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.