‘Double Dipping' Is a Perfectly Acceptable Income Strategy

10/09/2020 10:00 am EST

Focus: STRATEGIES

Mike Larson

Editor, Weiss' Safe Money Report

“Double dipping” is frowned upon at dinner parties, but as a trader or investor, there’s absolutely NOTHING wrong with financial “double dipping.” It’s a great way to generate multiple streams of income from the same stock or ETF, states Mike Larson of Safe Money Report.

In fact, it’s one of my favorite “Safe Money” strategies in today’s low-rate world!

Look, Federal Reserve speakers have made it abundantly clear in recent weeks that they have no plan to raise interest rates anytime soon. Likely not for a good, long time.

Chicago Fed President Charles Evans just said that policymakers need to “have an ‘in it to win it’ attitude toward our inflation objective.” Translation: Rates need to be pegged to near zero for ages, even if the economy picks up.

Fed President
St. Louis Fed President James Bullard Source: Wall Street Journal

St. Louis Fed President James Bullard underscored that message in a Wall Street Journal interview. He said, “I really don’t think we have to do anything differently now or going into next year” and that the Fed “will just keep with its current policy” regardless of whether economic conditions get better.

That makes for a fertile environment for harvesting income from stocks that spin off juicy income via dividends. It’s a core strategy in my Safe Money Report, and I’m happy to report that many of my recommendations are hitting paydirt for subscribers.

But if you want to generate even more, you can go a step further and invest in what I like to call “weekend windfalls.”

This involves selling options against high-quality stocks you already own…or even on stocks that you wouldn’t mind owning for a lower price.

Doing so generates extra income you can use for whatever you want. Those payouts can end up being equivalent to pretty hefty annualized yields—yields that put alternatives like savings accounts or bond fund yields to shame.

There are some risks involved, just like with any investing strategy. But in an environment where bottom-of-the-barrel interest rates are likely to be with us for a long, LONG time, “double dipping” to generate income from both dividend AND options payouts can make a ton of sense.

Safe Money Report focuses on these kinds of stocks, which include names in the consumer staples, food and beverage, retail, and health care sectors. Visit Safe Money Report here…

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