30 Aug Beat the Market Forever With One Trade (And Get Paid While Doing It)
Beat the Market Forever With One Trade (And Get Paid While Doing It)
Aug. 30, 2023
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This week we’re looking at a major problem with trading: the lack of a monthly income.
Bills don’t take a break but our portfolios do.
We’re trying to find ways around that.
One way is to open a super high yield savings account. We mentioned options like that in the last Newsletter.
Another way is to simply make one trade.
With one trade, we can beat the market and get paid a salary.
Is it too good to be true? Nope.
It’s just the VIG ETF.
What’s VIG? It’s the Vanguard Dividend Appreciation ETF. It specifically focuses on U.S.-based companies that have increased their dividends for the past ten years. Some members of the ETF include MSFT, AAPL, XOM, HD, and several others. It has a very low expense ratio and currently yields 1.87%.
That’s not a ton of free cash, but it’s a lot better than zero.
But here’s the big thing.
We could buy VIG with no trading skills and beat the market. Here’s the comparison between VIG and SPY:
VIG destroys the market’s returns since 1995 (if we re-invest dividends) and beats it whether we re-invest or not.
We could make one trade and do better than every financial advisor in the world.
More importantly, we’d get a paycheck the whole time.
Even better, when our account gets big enough, we could potentially live off dividends without selling shares. Using SPY, we’d have to sell shares to make money and, of course, our shares eventually would go to zero since we have no other way to make money.
If we want our account to grow, get paid, and beat the market, we can get all of that in one place.
In our next Newsletter, we’ll look at what billionaires are buying to create income streams.
Talk to you soon.
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.