My call was that a 41% gain in total over about 18 months is better than 6% compounding over the same time. Althouth Daily Income for Life is about finding income producing stocks, the trading strategy is also a three prong approach:
1. Using 75% of the portfolio, buy stocks that pay 10%+ dividend or royalty yeilds and reinvest all dividends/royalties.
2. Take capital gains income stocks and reinvest using technical analysis to accelerate capital appreciation
3. Actively trade small and medium cap stocks with up to 25% of overall portfolio value in order and direct capital gains into additional income streams.
O Exit Point Grapsh, show the nice long run. Too good not to take profits.
It's better to be sitting on cash at the end of a rally, and have all your positions being taken out by your trailing stops, than cursing yourself watching the graphs fall and your profits erode day by day.
However, the Daily Income for Life strategy needs to stay invested in dividend and royalty producing stocks to work. I'll be watching the market carefully using technical analysis to see where to reinvest - either in the same income producing stocks as were sold in the last month (BPT, AGD, O) or in new ones (Income Watchlist)
Even if the O pullback after this rally is only $2 per share, it will still be worth buying back in. Let's say our position size is 100 shares of O. The buy back price in two months is $30 after Greece is solvent again and Goldman execs are rightlully dragged through the mud.
The cost of lost dividends and exit-reentry commission would be about $32. So we are $200 - $32 ahead through actively managing our income investment using technical analysis. This is $168 cash. Tt would have taken approximately 20 months of dividend income to create this profit.
And if O keeps going up, we just pick another stock on our income watchlist that is looking better from a technical point of view.
