Cheapo Groovo

The high dividend / covered call strategy in action

Use the bond market to predict stock market direction

These days, the motto is "risk on, risk off".

So when you see 10yr and 30yr US Treasury Bonds rise in price (fall in yield), stocks will ultimaetly sell off. Flight to safety play.

Look at Portugal, Spain, and Italy bond yields. When they rise, stocks will ultimately sell off. Risk aversion play. Notice how the WSJ fails to give investors complete data!

Here are some facts for those of you who follow the mindless chatter on CNBC or any stock market blog:

Amounts outstanding on the global bond market increased by 5% in 2010 to a record $95 trillion. Government bonds accounted for 43% of the value outstanding at the end of 2010, up from 39% a year earlier.  The US was the largest market with 39% of the total followed by Japan (20%). The considerable growth means that at the end of 2010 it was much larger than the global equity market which had a market capitalization of around $55 trillion.

Another $41 in dividend income!

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03/30/2012  01:47:05

ORDINARY DIVIDEND (REM)

41.47

Recent Investment Moves

I'm not buying into the stock market rally.  Pumped up by the extension of payroll tax cuts, unemployment insurance, and central bank easing, the market cannot keep going up forever. Government debt (around the globe) cannot mathematically be paid back. So keeping interest rates artificailly low, government can roll over their debt, but this is simply life support for a terminal patient.

So I've been selling covered calls on $PFF at $39. Selling puts on $VXX at $20 and $18. And I just bought a little $REM.

Couch Potato Cash

I have yet to share all of my alternative income streams. I do this so you can realistically see what it takes and understand my philosophy of real diversification. **You can participate in these income streams by clicking them in my sidebar**

1. Utilizing my money seminars!
2. Teaching a few classes during the year.
3. Selling college textbooks on half.com & at Faculty Books.
4. Fiverr allows me to do small tasks (like clciking google ads) and earn $5.
5. Finding freebies and utilizing high-value coupons.
6. Collecting aluminum cans for scrap & the MI deposit.
7. Performing small tasks on Amazon Mechanical Turk.
8. Swagbucks ~ paid to search the Internet.

Hidden IRA Rules Limit Investment Choices

 

Mainstream media continues to state that traditional IRAs are tax deferred until retirement. Well, that depends. If your IRA owns mortgage-leveraged real estate, you owe UBIT.  If your IRA or 401(k) owns an active business structured as a pass through entity (such as an LLC or partnership), you owe UBIT.  UBIT, or Unrelated Business Income Tax, applies to tax exempt organizations including retirement plans. To pay UBIT, Form 990-T must be filed with the IRS.

 

Gold is a very popular investment these days. Is it possibble to own collectibles such as art, coins, and  physical gold inside an IRA? No. When an IRA purchases a collectible, the amount used to make the purchase is treated as distribution to the owner. It is included in the owner's gross income, and if the owner is under age 59½ and does not qualify for one of the exceptions, a 10% early distribution penalty is imposed on top of the income taxes.

Don't Be Fooled By DOW 13,000 | #stocks #investing #economy

If we take away FED bond buying, the payroll tax cut, unemployment extensions, the Bush tax cuts, and spending exceeding income over the holiday season, what would we have????

The analysis below doesn't even take into account the recent increases in gas and beef prices!

 

Option Selling Netted Me $377.69 in January

In February, I might get 100 shares of VXX and 100 shares of TMV put to me at a lower price than today. Since I buy low, sell high, I have no problem with that.

If TMV heads to $82, then 100 shares get called away in February. Nice!

Which Financial Analyst Told You About This?

Zero Coupon Bonds ~ bonds that are stripped of their interest. Since bond quotes and purchases are difficult to find from the Internet (another conspiracy as far as I'm concerned), I'm using ETF ZROZ as a proxy. It's up over 2% since the Fed agreed to buy up all US debt (aka Treasury bonds).

Zroz

 

 

Crisis-Proof Your Portfolio