{"id":10536,"date":"2022-08-12T18:13:10","date_gmt":"2022-08-12T23:13:10","guid":{"rendered":"http:\/\/blog.jlbn.net\/?p=10536"},"modified":"2022-08-12T18:13:12","modified_gmt":"2022-08-12T23:13:12","slug":"how-well-steal-a-7-monthly-dividend-from-amazon","status":"publish","type":"post","link":"http:\/\/blog.jlbn.net\/?p=10536","title":{"rendered":"How We\u2019ll \u201cSteal\u201d A 7% Monthly Dividend From Amazon"},"content":{"rendered":"\n

Just a couple weeks ago, many folks thought they had\u00a0lots<\/em>\u00a0of time to grab beaten-down stocks like\u00a0Amazon\u00a0AMZN<\/a>.com (AMZN)<\/strong>\u00a0and\u00a0Microsoft\u00a0MSFT<\/a>\u00a0(MSFT).\u00a0<\/strong>Since then, these blue-chips have really popped!<\/p>\n\n\n\n

Fortunately there is a way we can still<\/em> buy AMZN and MSFT at \u201cpre-launch\u201d prices. And collect 7%+ yields, too!<\/p>\n\n\n\n

We\u2019re not buying the shares directly. We\u2019re smarter than that. We\u2019re picking these stocks up with the types of 7%+ dividends we favor in\u00a0Contrarian Income Report\u2014<\/em>at steep discounts to their market prices.<\/p>\n\n\n\n

This \u201cdividend discount\u201d method lets us \u201cturn back the clock\u201d and buy the dip after the dip has already happened!<\/em><\/p>\n\n\n\n

We can also pick these stocks up with\u00a0outsized dividend yields of 7%+.\u00a0<\/em>And our payouts will often come your way monthly, too. That\u2019s a far cry from buying Microsoft on its own, with its practically nonexistent 0.88% dividend. And Amazon, of course, yields exactly 0% today\u2014and likely always will.<\/p>\n\n\n\n

How We\u2019ll Buy Our Favorite Dividends Cheap<\/strong><\/p>\n\n\n\n

I bring this up now because it\u2019s a similar situation to one we faced a little less than two years ago, in October 2020. Back then, you\u2019ll recall, the world was mostly in lockdown, but stocks had bottomed months before\u2014and were ripping higher almost daily.<\/p>\n\n\n\n

At\u00a0Contrarian Income Report<\/em>, we wanted to pick up some consumer names to profit from the rebound, not to mention the trillions of dollars Jay Powell & Co. (with an assist from the US government) was pumping into consumers\u2019 pockets.<\/p>\n\n\n\n

But we sure didn\u2019t want to pay the inflated prices these stocks were going for at the time! And because we\u2019re a high-yield service, we demanded big dividends\u2014<\/em>ideally big enough to let us retire on our payouts alone, without having to sell a single stock in retirement.<\/p>\n\n\n\n

So here\u2019s what we did.<\/p>\n\n\n\n

Using Closed-End Funds to \u201cTurn Back the Clock\u201d on Share Prices<\/strong><\/p>\n\n\n\n

Instead of buying these stocks directly, or through a low-yielding S&P 500 index fund, we went with an absurdly overlooked vehicle called a closed-end fund, or CEF.<\/p>\n\n\n\n

Specifically, we picked up the Eaton Vance Tax-Managed Global Diversified Equity Fund (EXG), <\/strong>which yielded an unheard-of 10% at the time and sent out that dividend as a steady monthly<\/em> payout, too!<\/p>\n\n\n\n

Second, EXG, which held both Amazon and Microsoft back then, traded at a ridiculous 12% discount to net asset value (NAV).<\/p>\n\n\n\n

Stick with me here, because these discounts are the key to \u201cturning back the clock\u201d and buying our CEFs\u2019 shares at prices well below those we\u2019d pay on the market. Because that 12% discount meant that we were, in effect, getting Amazon, Microsoft and the rest of EXG\u2019s stocks for 88 cents on the dollar!<\/p>\n\n\n\n

CEFs are the only<\/em> corner of the market with this sweet inefficiency. Unlike their mutual-fund and ETF cousins, CEFs have fixed pools of shares. Which means they can trade at premiums and discounts<\/em> to the values of their underlying assets.<\/p>\n\n\n\n

EXG had one more tool in its kit, too: it writes covered call options on its holdings. If you\u2019ve ever written covered calls yourself, you probably know it\u2019s a great way to generate extra income. It\u2019s also a pain to manage because it requires constant<\/em> call writing (not to mention an options-blessing in your account!). EXG is a one-click way to outsource this strategy.<\/p>\n\n\n\n

I\u2019m sure you can see where I\u2019m going here: buy a CEF at a particularly deep discount and you\u2019ve got a great shot at \u201cbonus\u201d upside as these deals vanish, catapulting the CEF\u2019s share price higher as they do!<\/p>\n\n\n\n

That\u2019s exactly what happened with EXG: we rode its closing discount window higher, clocking out in February 2022, by which time the fund\u2019s discount had almost completely vanished, narrowing to 3.7%.<\/p>\n\n\n\n

And the price, puppy dog-like, followed the closing discount the whole way, rising 28%. Throw in our 10% dividend and we netted out at a sweet 42% return in under three years!<\/p>\n\n\n\n

This pattern is easy to spot in CEFs: simply look for a discount that\u2019s wider than usual, then buy\u2014and ride along as your closing discount window drives up the share price. And, of course, you\u2019ll collect your high\u2014and often monthly\u2014dividend the entire time!<\/p>\n\n\n\n

One thing to note, though, is that I\u2019m not recommending EXG, which trades at a 1.5% premium to NAV, today. But there are still plenty of other big discounts on the board, including those I recommend in\u00a0Contrarian Income Report.<\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Just a couple weeks ago, many folks thought they had\u00a0lots\u00a0of time to grab beaten-down stocks like\u00a0Amazon\u00a0AMZN.com (AMZN)\u00a0and\u00a0Microsoft\u00a0MSFT\u00a0(MSFT).\u00a0Since then, these blue-chips<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[254,3421,3422],"tags":[6,3489,3431,3641,888,3659,3425],"_links":{"self":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10536"}],"collection":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10536"}],"version-history":[{"count":1,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10536\/revisions"}],"predecessor-version":[{"id":10537,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=\/wp\/v2\/posts\/10536\/revisions\/10537"}],"wp:attachment":[{"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10536"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10536"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/blog.jlbn.net\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10536"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}