October 1, 2014
This Powerful Strategy Nearly Doubled My Income
By Michael Vodicka
As an active income investor, I'm always jumping around between financial
websites. While I peruse these sites, I run across many investment ads
promising all sorts of results.
Sadly, more often than not what I see is outright misleading advertising
lining the pages. For every one method of income generation or investing that
is legitimate and factually-based -- there are ten others that are
So when I tell potential subscribers of my premium newsletter, Income
Multiplier, that my readers and I have been able to generate returns of
7.6%, 8.5% and 8.9% in as little as 53 days, it's understandable that such
claims might be received with a little bit of skepticism. So that's why in
today's issue of Dividend Opportunities I want to explain how my
Income Multiplier system works.
No fluff -- just facts.
To put it simply, we sell options on high-quality stocks to generate income.
I'll explain more about how we do this in a moment, but first let me begin by
showing you my track record. These are all of my closed trades since
Income Multiplier Closed Trades
||Days In Trade
|VZ May 46 Puts for $0.55||35||$920||5.4%||56.7%|
|RAI May 46 Puts for $0.75||53||$980||7.6%||56.1%|
|HAL Jun 55 Puts for $0.55||57||$1,100||4.9%||31.4%|
|ADM Jun 41 Puts for $0.40||50||$820||4.5%||32.9%|
|LVS Jul 70 Puts for $1.50||50||$1,500||6.2%||45.2%|
|CME Jun 65 Puts for $0.50||60||$1,300||3.8%||23.1%|
|WAG Jul 62.50 Puts for $0.70||49||$1,250||5.3%||39.4%|
|HFC Sep 42.00 Puts for $0.85||65||$840||2.7%||15.0%|
|MSFT Aug 38.00 Puts for $0.68||94||$760||8.9%||34.6%|
|ABBV Aug 47.50 Puts for $0.60||87||$950||6.3%||26.4%|
|DOW Sep 47.00 Puts for $0.85||85||$940||8.5%||36.5%|
|MET Sep 48.00 Puts for $0.59||78||$960||5.1%||23.0%|
|LO Sep 52.50 Puts for $0.74||71||$1050||6.6%||34.0%|
100% of my closed trades are winners -- all with double-digit annualized
In short, every week I recommend income generating investments using my
high-probability put-selling system. While some may be intimidated by the
thought of selling options, the reality is that put-selling is quite simple.
(And to make it even easier, each new subscription includes a video tutorial,
interactive Q&A sessions and strategy guides.)
You see, selling puts isn't just for investors with a bulging bank account.
For example, I recently closed a trade that I recommended back in June for a
6.3% gain -- annualize that and you're looking at an impressive 26% return.
Even better, with most brokerage firms, investors only needed a $950 deposit
to execute the trade.
This profitable trade wasn't with some high-risk small-cap stock either. We
only focus on high-quality stocks with our system. It's a time-tested strategy
I first developed as a bond trader inside the walls of a multi-billion-dollar
trading firm. Since then, I've figured out how to increase the strategy's
effectiveness and moved on to share this strategy with those who've followed
Here's how it works...
When I first developed the Income Multiplier system, I created a fundamental
screening system that focuses on four specific company traits that have a
strong history of beating the market.
1.) Industry leader with sustainable edge
2.) Industry-best dividend and high dividend growth
3.) Companies that are buying back massive amounts of their own stock
4.) Undervalued share price
All of the companies in the Income Multiplier portfolio have these key traits.
And that shows up in historical performance analysis.
Income Multiplier Stocks Beat the Market
What you see in the chart below is that the companies we currently have open
positions in have crushed the market in the last 10 years, returning more than
170%. The S&P 500, meanwhile, gained a little more than 90%.
Looking forward, I fully expect this history of outperformance to continue.
So when I find a stock through my screening system and sell an option, I'm
looking for one of two desirable outcomes.
1.) Generate income: Selling an option produces income that is immediately
deposited into the option seller's brokerage account.
2.) Chance to buy shares on a pullback: If shares fall below a certain level,
the option seller will have a chance to buy shares at a big discount to recent
Let's see how this works looking at the recent trade we did with a top
pharmaceutical company, AbbVie (Nasdaq: ABBV).
AbbVie has had a volatile run this year. When we executed the trade in May,
the stock was trading even on the year after jumping more than 15% over the
prior month. That made it a great time to implement our put-selling strategy
The $53.54 share price was a bit higher than I would have liked to pay for it.
So instead of buying shares, I sold put options on the stock.
That way if the stock fell to the lower price I wanted, I could buy the stock
at that low price. If it didn't fall that much, my subscribers and I would
simply get to keep the money we earned from selling the option in the first
place (called the "premium").
After 87 days, our AbbVie trade expired. In this case, the stock price didn't
fall to the point where we would have the opportunity to buy shares at a
discount. But that's OK. We simply pocketed the money we made upfront for a
6.3% return in 87 days.
To put that in perspective, if I had bought AbbVie shares, I'd have to wait
all year just to get a 3.2% return from their dividend.
This way, I was able to earn almost double the stock's yield in just under
three months. And again, I was able to do it without having to tie up my money
in shares of AbbVie, which had been pretty volatile all year.
So far I've made money on 13 out of 13 trades, and I see no reason why this
performance can't continue. There's plenty more to share about the conservative
options strategy that we use in Income Multiplier, but I don't have enough
room to share it all here. If you want to learn more about generating more
income in less time than traditional investing strategies,
you'll want to see this.
Chief Investment Strategist