With the average 1-year CD paying less than one percent, bonds paying zero, and the highest 10-year fixed annuity at 3.55% (which locks up your money for 10 years with heavy penalties if withdrawn), is it possible to still generate income while maintaining a conservative portfolio and liquidity? Using dividends as an income generator has long been a popular strategy, but without hedging, it does not protect investors against market volatility.
IPS Income Strategies combine the advantages of owning dividend stocks with the protection made possible by our expertise in hedging market volatility. Rather than attempting to diversify by investing in bonds, an extremely unreliable hedge with substantial risk exposure, the IPS Income Strategy adds downside insurance to a dividend portfolio, which eliminates most of the market risk and 100% of the default risk and interest rate risk associated with bonds.
By investing in a basket of dividend stocks, which greatly minimizes the risk of any one company cutting its dividend, while simultaneously owning downside protection on the portfolio at little to no cost, you are able to rely upon defined income while protecting against the wealth destroying dangers of a market crash.