Hello, stranger! New here? How about subscribing to my RSS feed? Thanks for visiting!

Another week has passed and it’s time again to thank my Entrecard advertisers.

Before I start, site visitors might have noticed that I’ve removed Blogrush from my blog. Not that I minded the real estate it was taking - my blog is pretty clean anyways.

I logged in this week only to learn that my blog had been suspended because I wasn’t showing the widget. Eh? Sometimes the blog design goes wonky… If the main column has been pushed too wide, the sidebar drops but the widget has always been shown.

I’m pretty honorable Blogrush, so please don’t flatter yourself that I’d try to game a traffic system that doesn’t work. Not that it’s a big deal or a great loss but geez, what are they doing to their existing publishers?

Anyways, for something that does work, let’s roll out my Entrecard sponsors for the past week

Million Euro Wiki - Sometimes we are biased to our geographical location. The paid wiki market in Europe hasn’t been cracked so with a little bit of ingenuity there might be an opportunity here.

I Make Money Online - So Can You - A very well designed blog. And although I haven’t reached the point where I’m raking in the big bucks online, Justin gave us working stiffs good tips on how to handle ourselves in boardroom meetings.

Sound of Gold - This is an Australian blog that also provides stock analysis on major American companies. Easy to read and to the point. I like the sound of that!

Invest with Dax Desai - Already on my blogroll. Finance, technology, politics and the environment - Dax shares his great insight on all these topics. A very well rounded blogger.

Tokyo Expat Life - This blog made a return trip this week to advertise again on my site. In fact, so did a few of you so thank you. This is always an interesting read of an outsider’s perception of Tokyo.

A-Train Finance - This is the blog of 22-year-old Anthony Ongaro. He quit his day job to work nights so he can trade during the day. He has a personal challenge of turning his $3000 into $9000 in three months. Good luck, Anthony and I’ll be reading your progress!

Money Moose - The #1 unprofessional money professional. A humorous look at the world of business. The Frugal Living Extreme cartoons are quite funny

Thanks again guys. I’ll keep on doing this for as long as I have advertisers

Blogging :: 4 Comments »

Did you enjoy the post?

Subscribe to Money Relations and the Comments as well.

Share in Social Media

   

Related Posts:

• Entrecard link love - week 3
• Entrecard link love - week 4
• Entrecard link love - week 6
• Entrecard link love - week 5
• Entrecard link love - week 7

Today ends my five part series on swing trading for interest, dividends and capital gains. Part 1 and Part 2 set up the definitions of dividends and ETFs. Part 3 supplied an example of the strategy involved while Part 4 described the execution.

I guess all that’s left now is to find out how I did.

Well, it’s not going to be a 2 day turn around like I had hoped. As explained yesterday, in order for this strategy to be successful, it depends on several factors including the reporting of bellwether companies. Oracle reported on the Ex-dividend date and the news was good. Since I bought Proshares UltraShort (QID) which tracks twice the inverse of Nasdaq-100, this was bad for me. I had bought at $40.32 with a $0.47092 dividend and it closed yesterday at $38.22 with a High of $39.69.

Now, no need to panic as I had thought this through.

My QID shares were bought with US cash I was sitting on, in my tax-deferred RRSP account (401k for Americans).

Of special note, the dividends I’m getting cannot be “wash traded” (to avoid exchange rate conversion) with TD Waterhouse’s US money market fund. The profit will be converted to Canadian dollars. You can only “wash trade” with buy/sell transactions.

Since I currently have an unrealized loss, I’m not selling. With a volatile market, I’m hopeful that I will still come out ahead. When I sell for capital gains, that can be “washed” and put back into the US money market fund to generate interest - the final component in this series’ title.

This swing trading strategy is not for everyone and you must be comfortable with any outcome. I was sitting on some American money and saw an opportunity to put it to work. Instead, now it’s “tied” up which for traders is a bad thing. Since this is my baby step foray in swing trading, I can wait it out.

During the progression of my blog, it was hinted that this was the direction I’m heading. I will probably be trying this again. I’ll let y’all know about the gory details

P.S. The brother gets to live.

Definitions, Investing, Swing trading :: 2 Comments »

Did you enjoy the post?

Subscribe to Money Relations and the Comments as well.

Share in Social Media

   

Related Posts:

• Interest, dividends, capital gains - an all-in-one investment strategy, Part 2
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 4
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 6
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 1
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 3

Today is the fourth day in a 5-part series on swing trading for interest, dividends and capital gains.

Let’s recap what has been discussed so far.

Day 1 explained dividend terminology. It also explained why the share price of a company’s stock drops on Ex-dividend date. The market takes into account the dividend payout when things stay the course with no news.

Day 2 defined Exchange Traded Funds. Some ETFs also distribute dividends but the share price does not necessarily drop by the dividend $/share amount on Ex-dividend date. The reason? Because they track securities.

Day 3 provided an actual example that put these two concepts together. I explained how a trader can make money with dividends and have a capital gain within a 2 day turn around.

Today I’ll talk about the conditions needed to make this strategy successful.

Obviously, the difference in the buy and sell price plus commission fees cannot exceed the dividend. This is a given. Therefore, the higher the dividend, the greater the “wiggle” room and chance for profit.

How can I protect the dividend? By doing a lot of studying.

1. Historically, is the typical ETF trading range greater than the dividend declared?
2. Are there any economic data coming out that would affect my buying and selling price?
3. Along the same vein, are any bellwether companies reporting during this time?
4. How closely does the ETF track the underlying securities?
5. How liquid is the ETF?
6. Am I comfortable with this strategy if I end up losing money?

Having done my homework and understanding the risks and consequences, I did buy Proshares QID yesterday at $40.32 and today is the Ex-dividend date. I am looking at a $0.47092 dividend cushion.

Despite my joking around about killing my brother if this doesn’t work, I have enough confidence in him to trade for me. Today, I’m depending on his skill to read market activity to pocket some of this dividend and even get a capital gain.

I’ll let you know how this turns out tomorrow

Definitions, Investing, Swing trading :: No Comments »

Did you enjoy the post?

Subscribe to Money Relations and the Comments as well.

Share in Social Media

   

Related Posts:

• Interest, dividends, capital gains - an all-in-one investment strategy, Part 2
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 5
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 6
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 1
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 3

Today is the third part of a 5-day series on swing trading for interest, dividends and capital gains.

Or, the alternative title is How I’ll kill my brother if this doesn’t work strategy.

Part 1 talked about how the share price of a company drops on the Ex-dividend date. This drop is usually equal to the dividend in the absence of news.

Part 2 talked about how Exchange Traded Funds track indices, commodities, etc. Some ETFs also have dividend payouts but the drop in share price does not necessarily equal the dividend - because they track an underlying security.

Putting the concepts together, one can theoretically buy an ETF the day before the Ex-dividend date and sell it on the Ex-dividend date - pocketing the dividend and a capital gain in a 2 day turn around time.

Let’s look at an example.

I first mentioned ProShares’ Short and UltraShort ETFs during the market downturn in August.

Proshares’ Short tracks the inverse (opposite) of the Nasdaq-100 index while the UltraShort track twice the inverse.

I will only talk about the UltraShort.

Below is a graph that shows the UltraShort (QID) and another ETF, the PowerShares QQQQ. The QQQQ that tracks the Nasdaq-100 “normally”.

Notice that the QID is the inverse of the QQQQ and is amplified by a magnitude of 2.

Why would anyone buy the QID? If you believe there is a downturn in the market, you can use it to make money. Traders know how to make money when the market is good and bad.

Now lets look at the QID’s dividend distributions for the last 3 quarters.

Now let’s examine the historical prices of the day before the Ex-dividend date and during the Ex-dividend date itself.

Remember, the basic premise is that I want to take advantage of the dividend and sell for a capital gain. As you can see, this is possible if you buy at (Ex-dividend date – 1)’s Low and sell on Ex-dividend date’s High.

3rd quarter

2nd quarter

1st quarter

These three quarters illustrate that it is possible to receive a dividend and not suffer the consequences of a capital loss but a capital gain. Sure, this is a small sample but remember the “theories” of Part 1 and Part 2.

Can a trader always hit the Lows and Highs? Er, no, but there is the cushion of the dividend. As long as the dividend covers the difference and commissions (I won’t talk about exchange rates as this strategy is applicable to any market), you will make a profit.

I’ll expand on this strategy again tomorrow.

Definitions, Investing, Swing trading :: 1 Comment »

Did you enjoy the post?

Subscribe to Money Relations and the Comments as well.

Share in Social Media

   

Related Posts:

• Interest, dividends, capital gains - an all-in-one investment strategy, Part 2
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 5
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 4
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 6
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 1

Today is part two of a 5-part investment strategy series that involves day trading for interest, dividends and capital gains. Or, subtitled, How I’ll kill my brother if this doesn’t work strategy.

You can read part 1 here.

Yesterday, I briefly explained dividend terminology. I also explained that on Ex-dividend date, the share price of a company usually goes down based on fundamentals. The market takes into consideration the effect the dividend has on the company.

But, is there such a… thing that would trade higher after a dividend payout in the absence of any news?

How about Exchange Traded Funds?

From Investopedia, here is the definition of an Exchange Traded Fund:

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold.

As mentioned, some ETFs track indices and they can distribute dividends too. However, the price of an ETF does not necessarily drop on the Ex-dividend date by an amount equal to the dividend.

Interesting…

So now there is the possibility of pocketing a dividend and selling for a capital gain should the share price go up.

Tomorrow, I will explore how to earn dividends and capital gains from the same investment in just two days.

With this prep, you know it’s going to be an ETF.

Definitions, Investing, Swing trading :: 5 Comments »

Did you enjoy the post?

Subscribe to Money Relations and the Comments as well.

Share in Social Media

   

Related Posts:

• Interest, dividends, capital gains - an all-in-one investment strategy, Part 5
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 4
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 6
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 1
• Interest, dividends, capital gains - an all-in-one investment strategy, Part 3