Not everyone wants higher interest rates. For homeowners, rising rates could translate to higher mortgage payments. For corporations, higher interest rates would increase their debt repayment burden. However, it’s not all going to be bad news, because there are strategies for investors to capitalize on rising interest rates. Since we are Income Investors, I’m going to show you a relatively safe one. With this play, there’s no need to use complicated financial derivatives. And you get paid a double-digit income stream just to be part of the game.
Sounds too good to be true? Well, let me explain...
In order to take profit from higher interest rates, you need to keep track of two simple variables: revenue and expenses. If you can increase your revenue when interest rates increase while keeping your expenses fixed, chances are you’ll see more profits on the bottom line. As it turns out, one company is well positioned to do exactly that: Prospect Capital Corporation (NASDAQ:PSEC). Headquartered in New York City, Prospect Capital is a business development company, or BDC. Its main business is to invest in middle-market companies in the U.S., most through debt financing. In other words, PSEC lends out money and collect interest payments.
Source: Income Investors
Related Articles:
- International Securities For A Diversified Income Portfolio
- International Securities For A Diversified Income Portfolio
- 6 Dividend Stocks That Gave Me A 20%+ Annualized Return
- 3 Simple Steps For A Successful Retirement
- 6 Rainy Day Dividend Stocks
________________________________________________________________
Subscribe to:
Post Comments (Atom)
Popular Posts Last 30 Days
-
Over the years, few companies have served income investors better than the S&P 500 Dividend Aristocrats. To become a “Dividend Aristocra...
-
There is a company that’s doing exactly what you want to do: lending to venture growth stage businesses in the tech sector. Better yet, that...
-
First, and perhaps the most obvious, is that being able to enter biotech stocks at a cheaper price — assuming the companies are not fundamen...
-
Cheap valued stocks with high yields will never go out of style. I could go on about the powers of compound interest, but I think we're ...
-
This has got to be the most interesting high-yield opportunity to watch this earnings season. The company was already one of the most genero...
-
Owning high-quality, high-yield dividend stocks is the most effective way for investors to achieve outsize returns over the long run. But wh...
-
If we can buy stocks in good companies that are also at discounts to their peers in the market, we’re on the right track toward better retur...
-
Owning dividend stocks can be a great way to not only grow your portfolio but also get a tax-effective cash return on your investment. Wheth...
-
Having a few trusty dividend stocks that you can approach with a "set it and forget it" mindset takes a lot of the stress out of i...
-
Investing in real estate can be lucrative. That is, if you don’t mind taking on a second job as a landlord. Would-be investors need solid cr...
0 comments
Post a Comment
Post a Comment