Originally Posted by JaxRed
Well, going back to my philosphy of Dividend Growth Investing.... I had two more of my stocks raise their dividends this week. TICC (a business development company) and NNN (a property REIT).
Jax - a strategy I tell my dad to use near retirement may be to buy dividend stocks, sell call options, and buy puts with the proceeds, this would band volatility.
Example if buying 1000 shares of Fifth Third (FITB) at 13.82, an annual dividend of $320 would be earned. 1000 Call options for Jan 17,2014 could be sold for $830 at $17 / share (capping the profits at $17 over the next year+) then with the proceeds put options could be bought at $10/share for $980. This would mean that the most you could gain is $3.20 / share and the most you could lose is $3.82 / share or less than 30% over the next year. If you aren't worried about the stock tanking selling options can be a way to generate income on the stock as well.