Congratulations to rlbeard6734. It is smart to borrow at 3.25% and then get 12% on the money. I pay 6.25 1/2 % when I borrow on margin. Where do you get margin money at 3.25%? I want some of that cheap money.
You have to pay income tax on the monthly dividend and you don't pay a tax on a paper gain.
The way I always look at is that the money is gone as soon as you purchase the stock. There is no lockbox where the money is kept and someone has already taken the money home. I have been through too many market crashes to realistically think differently. So whatever the price, no matter how much it changes, the only thing that matters is the dividend on a stock like PSEC. As long as PSEC pays a constant dvidend then I am gettng my money's worth for what I paid for the stock. I invested in PSEC for the dividend.
The higher the price goes then the lower is the percentage of interest on your that you get on your money. I like a high interest rate and low stock price when I buy more.
Dried chicken bones are the only ones that work. To get an absolute reaging you should also use a rabbits foot. Close your eyes spin aroung three times and then drop the dried chicken bones over the rabbits foot. After that it is all in how you read the bones. A thousand different people can come up with a thousand different readings.
Are you under the delusion that the government controls the Fed? Or that this is still a government of the people, by the people and for the people?
The government does not control the economy. The economy is controlled by the rich and powerful families in this country and England. Their wealth is in hard assets that increase in value with inflation.
Look up who owns the Federal Reserve Bank. It is not owned by the government or citizenry of this country. The president appoints the head of the Fed but is told who to appoint.
It is the workingman who suffers from inflation. He may get a raise this year to make up for last year’s inflation. Any money he has saved in a bank account loses value.
But if you buy at $11.20 and sell at $11.40 every month then then the increase in your holdings can be 80% greater than just holding and reinvesting the dividends. Of course it would be more work and a gamble.
$11.20 and $11.40 may not be the optimum numbers to trade at. But a $0.20 cent profit on trading is better than an $0.11 monthly interest. Can a few traders tell how hard or easy it would be to make the $0.20 per month.
It looks like the price is leveling off just below $11.40 before ex day. Just below $11.20 also seemed a level spot. So I would guess that traders could put in a sell order at $11.40 and it might be met sometime during a day. Then put a buy order in at $11.20 to get the stocks back. That will could them $0.20 per share by gambling instead of the sure $0.11 per share.
Fixed mortgages do not go up with inflation. PSEC makes loans tied to Prime Interest Rates. They can go up with inflation and will go up if the Prime goes up.
Day traders are playing against professionals who have high speet computers that can see a trade coming and get their bet in before it. The big banks have a bank of psychologists to figure out how the crowd will react to various changes. Once you get a sustem and they figure out how to beat it then they will beat you.
The reason for the inflation is to steal the retiree’s funds. It was once said that without inflation all the wealth in the country would end up locked in retirement accounts. That is when they stole the Social Security funds. The bankers are always greedily looking for ways to get retirement funds.
Fixed rate mortgages on property do not inflate while the value of the property inflates. That makes property a good investment. Rents go up with inflation and will provide a good income for retirement.
Good luck on your trades. I like my investments better and they take less work. I can buy a house outright for X dollars or buy same the house with the banks money and buy X/2 dollars worth of PSEC to pay the mortgage. I get free use of the property to rent or do whatever I want with. I build equity in the house both as the mortgage is paid down and as property prices go up.
Mortgage is for a very long time so you have to lok at long time trends. I eat a lot of fish. Fish that was $0.10 per pond when I was a kid is now $10.00 per pound. look at any 30 yar period start to finish since the fed was created and it will show you an inflation. I have plenty of a cushion to weather those periodic ups and down. Over the next 30 years PSEC and companies like them will pay fpr my mortgage.
All right I just made a guess. The Fed increase the money supply and has since its beginning. That is the reason they were created. Increasing the money supply creates inflation and transfers wealth to the rich. As inflation goes up worker’s savings and pensions have less value. The rich have their wealth invested in assets that increase in value with inflation. Hourly wages never keep up with inflation. A worker might get a cost of living raise this year for last year’s inflation if he has a good union.
We will have inflation in the next 30 years. Look at the value of a dollar now and what it was worth 30 years ago. The recessions do not equal the inflation. Inflation is more than double in 30 years.
So in constant dollars the price of PSEC should double in 30 years. If a recession came and they cut the dividend in half it would then be $0.11 per share or 6% per year. The mortgage payment stays constant and PSEC will covers it.
The FED guarantees 6% per year inflation. That compounds to 80% in ten years.
The brokerage wil pay the mortgage out of my funds dividend or no dividends. I have other funds (100% disability from VA) automaticall deposited to my brokerage account that far exceed the mortgage payment.