Forget Stocks And Bonds, This Is Where The Real Income Is

Investors are always searching for rules to help them make money, but there really aren’t many time-tested rules in the stock market.

The word “rule” implies that something will always be a certain way. In the stock market, however, the rules can change even after decades of consistency, which is why the market requires constant study. Investors need to know what is changing as the change unfolds.


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The relationship between dividend yields and interest rates is an example of how even longstanding rules can change… and keep changing.

Stocks are generally considered to be riskier than bonds, and that relationship was clear in the early part of the 20th century. Because of the higher risk, it was believed that investors should be paid more to hold stocks than bonds. This led to the belief that dividend yields should be higher than interest rates — a relationship that held up well until 1959. It was during that year that the relationship changed… but no one could explain why.

The chart below uses data from Nobel Prize-winning economist Dr. Robert Shiller’s website to show dividend yields (red line) and interest rates (green line).

#-ad_banner-#In the past few years, the relationship has flipped again without any explanation.

The recent shift is the more interesting of the two. With interest rates now lower than the rate of inflation, I consider bonds to be riskier than stocks. At the very time you’d expect bonds to yield more than stocks, the relationship that had held for more than 50 years has broken down.

We don’t know what the future holds, but this chart tells us that it is important to expect the unexpected. Generations of investors believed the dividend yield on stocks should be higher than the yield of long-term bonds. After that relationship flipped, generations believed bonds should yield more than stocks. Now, we are in a period of time where there isn’t any reason to expect the relationship to be consistent.

Here’s another thing generations of investors believe that doesn’t hold true: Stocks and bonds are the only source of income in the market.

There is another way to generate income from the stock market without owning bonds or stocks. You collect a payment up front and you get to keep the money no matter what. Then, the next week, you get to repeat the process with a different company. You can do this over and over again throughout the year, building a nice monthly income stream.

Just look at the kind of returns some everyday investors just like you have earned with this strategy:

You’re probably asking, “What’s the catch?”

There’s no catch per se, but you do have to be willing to use options.

I know the word “options” makes some people uneasy, and I understand why. When I started trading, people warned me that options were risky.

But the truth is, there are a lot of misunderstandings about options. Believe it or not, options can actually help lower your risk. In fact, when used correctly, the odds of success are extremely high.

Since I began teaching this strategy to investors in my Income Trader service, we’ve closed well over 200 income trades and 90.9% of them have been winners.

The particular options strategy I use is selling puts.

How I’ve Sold Put Options With 90.9% Success
Selling puts is not complicated. There are essentially two phases – the income phase and the waiting phase.

Phase 1: You collect income known as “premium” up front from the options buyer. This can range from as little as $30 to hundreds of dollars per trade depending on how many contracts you sell.

In return for this income, you agree to buy 100 shares of the stock per option contract you sell if the stock drops below a certain price (what’s known as the “strike price”) by a certain date (the “expiration date”).

Phase 2: You wait for the option to expire, which is typically between 30 and 90 days away.

Now, if the stock does fall below the strike price, you will be obligated to buy the shares at that price. This is why I only sell puts on quality stocks I would be happy to own at a discount anyway.

But if the stock is above the strike price, you simply keep the cash and move on to the next income opportunity. And with the vast majority of my trades, that is what has happened.

If you had a $150,000 portfolio and followed my advice in Income Trader each week in 2016, and sold one put contract per trade, you would have averaged nearly $5,408 every month. That’s $1,298 per week. $64,896 in a year.

2017 was just as good to us, with many readers reporting thousands or even tens of thousands of dollars in income every month.

And this year, my readers are on track to pocket an average of $29,577.

For those of you who are interested in learning more about this strategy, I’ve put together a brief, informative special report. I’ve been told that it’s the clearest explanation of selling puts you’ll ever see.

So, if you have just a few minutes minutes to spare, I can teach you how to generate thousands in income each month without buying stocks or bonds. Just click here.