While dividends can be a great way to generate income, there’s another strategy that can help propel your returns even higher. It’s a strategy many have heard of, but few appreciate its real wealth building potential.
There’s a strategy that can help increase the income available from a stock. And it’s something we’ve used at Options Trader, which the following trade illustrates.
Low interest rates are forcing many investors to find other ways to generate income what is often missed is the impact of interest rates on option prices.
Coming into this reporting season, you’re going to see a range of articles about companies looking to undertake share buybacks.
Not only are mass pay cuts coming to the Aussie market, they’re already happening. And it could set the country back 20 years.
The more consistent a stock’s income stream is, and the more its dividends grow (sustainably), the higher the value the market will put on it.
If you’re investing for the long term, you need to find something tangible on which to base your decision.
The first thing investors often look at is the dividends paid out over the last 12 months, divided by the share price, expressed as a percentage.
The pros understand the real driver of stock market returns is income, not just capital gains. This is the crux of income investing.
In the 2015 financial year, the RBA reports that Australian companies paid out $78 billion in dividends to shareholders.