Dividends Are Losing Their Allure

Investors have long looked to dividend stocks as a means to generating investment income.For decades this has been an effective strategy to increase cash from investing. However, in today’s market investors are more uncomfortable on how to identify new income opportunities.They should consider allocating a portion of their portfolio to selling options for premium income.The returns can be as high as 5% or more in a single month using the stock breakout strategy.

In a recent article published in the Wall Street Journal, “Dividends are losing their allure due to rising rates”, there is a case that yields are too low in today’s market. Here is an excerpt:

A heated stock market rally combined with a sharp climb in benchmark interest rates this year is eroding the relative value of companies that pay out chunky dividends to their shareholders.

Low interest rates over the past few years have boosted the attractiveness of high-dividend stocks that offer up income at a time when bond investors were earning next to nothing. For some sectors, that was a key reason to invest. But recently that’s reversed.

As the S&P 500 has climbed, the share of investment gains coming from collecting those dividends has been falling. The S&P 500?s so-called dividend yield over the last 12 months was at 1.73% Tuesday, its lowest since 2011. 

Let’s exam what a 1.73% yield means to an investor.This means an investor will earn 0.4325% each quarter or 0.144% each month.Based on having $10,000, an investor would earn $173 per year or $14 per month. What can one do with $14 per month or $144 if you invest $100,000? Not MUCH!

For investors seeking monthly income, there is a better way to create cash with your investment portfolio.At Get Rich Investments, we have produced returns of 5% or more in a month which is an annualized return of 60%.You may ask if this is a risky investment to achieve such a great return.While all investments have some level of risk, this investment rewards the investor with a significantly higher return.