With the average 1 year CD paying less than one percent, bonds paying zero, and the highest 10 year fixed annuity is 3.55% which locks up your money for 10 years with heavy penalties if withdrawn, how can interest be generated in a very conservative strategy that provides liquidity? Using dividends as an income generator has been a tried and true way to grow wealth since the turn of the 20th century.

The IPS Income Strategies use this concept of owning dividends with IPS Strategic Capital’s expertise in hedging market volatility.

If you can own a basket of dividend stocks, which would eliminate the risk of anyone company cutting their dividend and at the same own downside protection on the portfolio at no cost, that would give you a defined income without the worry of a market crash.

What this means to you is you can collect 4-6% a year in income with extraordinarily little downside risk in the underlying stocks.

 IPS Strategic Capital believes in adding downside insurance to a dividend portfolio, eliminating most of the market risk, 100% of default risk, 100% of interest rate risk, and it is 100% liquid. It is the perfect place to park cash.

This strategy is designed to scrape the dividend from a basket of dividend stocks pretty much capping your upside and downside lowering your standard deviation from the enhanced dividend strategy. It has a little less variation of movement and thus a little less return.

This strategy is designed to just scrape the dividends and eliminate as much movement of the underlying stocks as possible which allows the investor to add and remove money as they see fit and feel comfortable that the value of their account is going to have as little movement as possible.


Please note that the information contained in this piece is intended for investment professionals. This information should not be misconstrued as an offer to buy or sell, or a solicitation to buy or sell securities. Any performance contained in this article is strictly informational and is not necessarily indicative of the future performance of investments. Past performance is not indicative of future investment performance and investors should always consult a financial professional prior to making any investment decisions.
The performance of the IPS Bear Strategy is representative of the performance of the IPS Bear Strategy composite. This composite is managed via separately managed accounts. The performance data is shown net of fees. The performance of the accounts comprising the IPS Bear Strategy was scaled to a 20% exposure to represent a hypothetical portfolio that was invested 80% to the S&P 500 and 20% to the IPS Bear Strategy. This is purely a hypothetical portfolio that is intended to illustrate how the IPS Bear Strategy can be combined with equity exposure to provide reduced drawdown and volatility. Any performance relating to the S&P 500 is representative of the price returns of the index. Please note that the S&P 500 is an index and therefore not a directly investable asset.
The IPS Bear Strategy trades options contracts on the S&P 500 index. Prior to buying or selling an option, investors must read a copy of the Characteristics & Risks of Standardized Options. Put options give the purchaser the right, not the obligation, to sell a specified number of shares of the underlying security at a specified date in the future. The seller of a put option has the obligation, not the right, to have a number of shares delivered to them at a specified price at a specified date in the future in exchange for receiving a premium upfront for the risk.
The results shown here are strictly for informational and educational purposes. All investments have the potential for profit and the potential risk of loss. Changes in investment strategies, contributions, or withdrawals may cause the performance results of one’s portfolio to differ materially from the reported composite performance. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s portfolio. One should always consult an investment advisor before making any investment decisions.