My colleague at StreetAuthority, Paul Tracy, has been finding low-risk and profitable investments for over a decade. Lately, he has become concerned about the risks of the stock market over the long term and believes "dividends will account for ALL of the market's return for the next decade."
If he is correct, and the arguments he makes to support this conclusion are very strong, most investors will face disappointments for years to come. The best long-term strategy is to buy high-quality value stocks that have sustainable, growing earnings and pay a safe dividend.
I agree with Paul's long-term views, but I rarely buy these kinds of stocks outright.
You see, I use a special strategy that allows me to buy high-quality stocks at a discount and even earn extra income from stocks I own. It's not for everyone, but I think it's one of the smartest, highest-percentage strategies in the financial world.
I'm not going to beat around the bush. It involves options. But hear me out, the strategies I use are safer and simpler than you might imagine.
For example, with one option strategy I use, one of two things can happen...
1. You receive instant income and keep it as pure profit -- without ever having to buy a stock.
2. You get the opportunity to buy shares of a company you want to own anyway -- just at a discounted price. You'll even know the price up front before you ever make the trade.
You're basically betting that a great company won't fall to fire-sale prices in a short period of time. We'll be right in most cases and book the income as 100% profit. It puts you in control of when (and how much) income is deposited into your account, even if the market is flat for the next decade... or century for that matter.
This strategy also allows you to generate income from blue-chip stocks that don't pay dividends.
Amazon (Nasdaq: AMZN), for example, is one of the most dominant retailers in the world. Yet, it's completely out of most income investors' radar since it has never paid a dividend. Using the strategy above, I was able to collect $710 in income with a $4,400 "down payment." That's a 16% return on a trade that will last less than four months. And unless Amazon's stock falls 17% in the next eight trading days, I'll never have to buy one share.
Once in a while, however, we'll have to buy shares. That's not a bad thing, we're getting a great deal on a stock we'd want to own anyway. Plus, we can then turn around and collect extra income from the stock using a different options strategy.
This might be the closest thing to a no-lose strategy you'll find in the markets. This doesn't mean there's zero risk or that these strategies are for everyone. In fact, if you have less than $25,000 in your trading account, I don't recommend you try these kinds of trades.
I'm putting the finishing touches on a report that details who should (and shouldn't) try these strategies and answers nine other commonly asked questions about boosting income with options. If you'd like learn more about generating income using options, simply click here and tell me where to send the report.
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Disclosure: Neither StreetAuthority nor Amber own shares of securities mentioned in this article. In accordance with company policies, StreetAuthority always provides readers with at least 48 hours advance notice before buying or selling any securities in any "real money" model portfolio. Members of our staff are restricted from buying or selling any securities for two weeks after being featured in our advisories or on our website, as monitored by our compliance officer.