How to earn more income through investments: tips for today’s market

Coastwise Capital Group | Scott Kyle

Learn how financial advisors can help you earn more income in today's market.

By Scott Kyle, Chief Investment Officer at Coastwise Capital Group

In today’s economy, many investors may be wondering how to earn more income through investments – and no wonder. With ten year Treasuries yielding a paltry 1.9% and bank savings rates hovering close to 0%, where is an investor to turn to generate significant income in this historically low interest rate environment?

At Coastwise, we specialize in generating income through the purchase of high quality dividend paying stocks combined with the conservative use of options. Some advantages of this “covered call” approach include the following:

  • Dividends have provided 50% or more of the stock market’s returns over the last century; thus high quality dividend stocks represent a vital part of a core stock portfolio.
  • In buying dividend paying stocks, you can have predictable cash flows at timely intervals independent of capital (stock) prices.
  • Dividend income tends to rise faster than inflation.
  • Dividend income is tax advantaged.
  • Income can be attained from dividend paying stocks across a variety of industries including financials, consumer staples, integrated oil and other sectors.
  • You don’t need to sell underlying shares to generate income.

But it can even get better. To further enhance income, options can be sold against positions to generate additional profit, reduce price swings and boost overall returns.  When most people hear the word “options,” they think of day traders or risk takers.  Simply put, the sale of calls against a portfolio of stocks generates income, reduces volatility and makes the portfolio more conservative. For example, a well diversified portfolio of stocks paying 3% in dividends (50% more than the 10 year treasury) can see another 5% – 10% or more of income generation through the sale of covered calls. In cases where individuals rely on income to cover expenses, this can be a powerful investment strategy. However, the best way to optimize such investments is with expert guidance from an experienced money manager.

Outsmart the odds with smart, personalized financial advice

Whether you are an experienced investor or a novice still struggling to decipher the stock market, professional guidance from seasoned money managers is an ideal way to make the most of your portfolio. At Coastwise Capital Group, we offer superior investment services for individuals, families and institutions – all with a customized approach from our trusted and independent San Diego financial advisors. Seize the opportunity to earn more and invest smarter: contact us today, at www.coastwisegroup.com.

The information in this article is strictly for educational and illustrative purposes and is not an attempt to furnish personalized investment advice or services.

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Posted by Social Media Staff on May 24, 2012. Filed under Columns, Scott Kyle, Sponsored Columns. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

1 Comment for “How to earn more income through investments: tips for today’s market”

  1. Jared Manlove

    Wow I had no idea that dividends were such a huge percentage of return. I always thought most of your return comes from capital appreciation.

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