I'm including what should be one of the most useful tools to
combat the ongoing fiscal cliff debacle …
A fiscal cliff calculator.
Once you know how much you stand to lose, you can begin to
search for alternative ways to bring in income. To that end, I've
provided a few simple and effective ways that, if used properly,
will make up help to recuperate lost income.
But before getting to the nuts and bolts, I have a few
questions to ask.
Are you a dividend investor? If so, are you concerned about
the upcoming fiscal cliff?
If you said yes, you should know that the same sentiment is
shared by numerous other hard-working investors. The financial
media has made investors acutely aware of the concerns facing
dividends. Of course, the blame leans toward whatever political
bias you prefer. And while I am concerned with the progress (or
lack thereof) surrounding a resolution to the cliff, I can't be
fooled into thinking that the current posturing from both sides
will cease just minutes before the deadline.
So the question is: As a self-directed investor, do I just sit
idly by waiting and hoping for the best? Keep in mind that many
of you could potentially lose 10% to 15% of your dividend income
in less than a month.
Are you going to accept the loss of income and chalk it up to
another way the government is taking hard-earned money out of
your wallet? If so, you should probably just stop reading now
because what I'm about to discuss is not for you. But if you're
not willing to accept what may be inevitable …
I will never allow political agendas to affect how I invest.
Yes, they control the regulations and tax rates. And I have no
problem following them, as it's out of my control. And so is the
Several months ago I looked at
historical dividend tax
rates. Lower taxes did not have an overwhelming effect on the
performance of dividend-paying stocks
. In fact, returns on dividend-paying stocks were
actually higher during periods of higher taxes on dividend
So what's all the fuss about?
Simply stated, the information age allows the financial media
to hammer us over the head with mostly useless news when it comes
to investing. Little, if any, of it is actionable. And that is
what we all want as self-directed investors … at least I do.
So, as self-directed investors, where do we
First, stay the course. History tells us that the dividend tax
rate has no bearing on the long-term gains of dividend stocks. So
don't make any rash decisions.
Second, calculate what the fiscal cliff will cost you by using
fiscal cliff calculator
. The calculator is rather simplistic, but it should give you a
ballpark figure as to what you could potentially lose should the
politicians fail to reach a resolution.
Third, learn strategies that will make up for your lost
income. I have discussed in previous
two statistically based methods that should help you to get
The Only Way Dividend Investors Can Safely Avoid
the Fiscal Cliff
A Safe (and Permanent) Income Alternative to
When the dividend tax rate changes - and it eventually will -
income from dividends will be no more disadvantaged than income
from bonds. And dividends offer more opportunity for growth. Just
ignore the constant stream of noise being thrown at you on a
daily basis. Ultimately, we all know dividends will remain a
sound investment over the long term … no matter how Congress
finally decides to act.
But it's up to you to combat your lost income. I have provided
a few strategies that will hopefully kick start your journey into
alternative investment strategies.
If you would like to learn more about alternative investment
strategies - more specifically, options selling strategies -
please join my free weekly newsletter,
The Strike Price
. Every week I teach self-directed investors how to invest using
statistically based options strategies with a high probability of
Stay the course,
Editor and Chief Options Strategist
The Strike Price