Best ways to save money right now?
in Banking, Insurance & Loans ·
I’ve been looking into an interesting strategy that could potentially net you an annual return of roughly 12–15%, all while keeping risk at a minimum:
The idea is to park your capital in a money market fund (which generally yields around 6–9% annually). Then, around mid-December, you pull those funds out and pivot into AT&T stock (which typically sees gains of about 6–10%). You’d want to sell your AT&T shares just before the company officially announces its dividend payout—specifically, before February 10th.
Now, you might be wondering: why bother selling the stock before the announcement?
It’s pretty straightforward: once a dividend is declared, the stock price almost always drops by the exact amount of the dividend payout. From a purely mathematical standpoint, there’s no real benefit to holding onto the shares longer than necessary.
There is, of course, the small chance that they decide not to issue a dividend at all, but we won't know that until after February 10th. Historically, however, the stock tends to trend upward starting about two months before the dividend announcement. By selling right before that news hits, you capture that upward momentum regardless of whether they actually end up paying out a dividend this year or not.
Once you've liquidated the position, you simply move the cash back into the money market fund and repeat the cycle every year.
The idea is to park your capital in a money market fund (which generally yields around 6–9% annually). Then, around mid-December, you pull those funds out and pivot into AT&T stock (which typically sees gains of about 6–10%). You’d want to sell your AT&T shares just before the company officially announces its dividend payout—specifically, before February 10th.
Now, you might be wondering: why bother selling the stock before the announcement?
It’s pretty straightforward: once a dividend is declared, the stock price almost always drops by the exact amount of the dividend payout. From a purely mathematical standpoint, there’s no real benefit to holding onto the shares longer than necessary.
There is, of course, the small chance that they decide not to issue a dividend at all, but we won't know that until after February 10th. Historically, however, the stock tends to trend upward starting about two months before the dividend announcement. By selling right before that news hits, you capture that upward momentum regardless of whether they actually end up paying out a dividend this year or not.
Once you've liquidated the position, you simply move the cash back into the money market fund and repeat the cycle every year.