My RAVEN Strategy for Crypto-Crushing 9.2% Dividends

These days it seems like every investor is looking for that a big thing that will make them rich – the latest stock, technology, fashion or whatever.

We dividend contrarian investors know these folks well – you probably have a friend or family member who has chased gains in crypto, NFT, tech nonprofits, or god knows what else over the course of of recent years.

Heck, they might even have poked you a jab or two about your “boring” dividend stocks and closed-end fund (CEF)!

Then 2022 arrived. And while everything was hit last year, we CEF investors had the final say, as we could use dividends from more than 7% of our funds to pay the bills. And we certainly haven’t experienced anything like the declines the crypto crowd has suffered.

You probably nod your head as you read. And to be fair, it’s easy to get sucked into these types of investments, especially when we see some of the big profits made by early investors in crypto and meme stocks. The problem is, when the party ends, it ends quickly – and getting out in time to turn a profit is largely down to luck.

It’s gambling, not investing.

So how do you avoid this trap? Well, the only thing to look for is whether the asset in question has actual value. If you pursue wealth while ignoring value, you will end up falling for a host of scams and tricks from shady people.

How to be a CROW

In light of this, I suggest ignoring the fads and being what I like to call a RAVEN investor. It means to “rationally assess value and look at the numbers” (okay, it might not be perfect, but it’s a simple way to remember what’s most important). RAVENs stick to logic and reason, relying on accurate numbers and methodologies to assess the value of every investment opportunity they see.

In the long run, the RAVENs win the investment game. Not only has study after study shown that consistent, long-term investment in high-quality assets provides reliable returns, investing for the long term also means losing no more than 70% of your investment! Losses like these are simply impossible – or at least very hard to do – if you invest like a RAVEN.

And it’s not difficult. All you need to do is follow these four basic rules.

• Have a plan and a goal and stick to them. What works for one investor may not work for another. Remember why you are investing and what you need to get there. Investing isn’t about getting the highest score, it’s about getting the freedom to live the life you want.
• Data and facts are king. Lots of investments to feel Well. That doesn’t mean they are Well. More than anything, investors who rely on facts rather than feelings beat everyone else. But it also means you have to be open-minded and ready to change your strategy when the data changes. For most people this is difficult.
• Market sentiment is never good or bad. Emotions cannot be good or bad. They can, however, be signals of what’s to come in the short term, so don’t ignore them, but don’t let them cloud your judgment either.
• Cash flow creates value, nothing else. If something produces or distributes money, it still has value. If not, it might be valuable for a short time, but, like Beanie Babies, it will eventually be worthless. Focus on generating cash if you want to gain financial independence.

This last rule trips a plot of people. Take for example, Apple

AAPL
(AAPL), and compare it to bitcoin
BTC
. The first produces a lot of money: $99.8 billion in 2022, 5% more than the previous year and more than 80% more than before the pandemic.

Bitcoin, on the other hand, produces nothing. It’s not supposed to, because it’s a currency, and currencies don’t produce anything. Apple’s cash flow of nearly $100 billion a year is far better than Bitcoin’s $0 for infinite cash flow, so it’s no surprise that Apple has been steadily growing. increase, even after the full bursting of the Bitcoin bubble.

And that doesn’t just mean companies’ cash flow. Your cash matters too. If you need a 7% return on your investments to cover your expenses, you will never run out of money if your portfolio is earning more than 7%. Stick to low-yielding funds and no-yielding stocks? You are much more likely to run out of money.

Luckily, there are hundreds of CEFs that produce such cash flow and more, while investing in solid companies like Apple.

Take, for example, one of my longtime favorites, the Liberty All-Star Equity Fund (USA), a 9.9% yielding fund that has long owned Apple, alongside Microsoft

MSFT
(MSFT), Amazon

AMZN
(AMZN), Visa

V
(V) and Alphabet (GOOGL). This fund is a good replacement for your low-yielding index fund, as its focus on large-cap US companies has been a source of both stability and strong earnings for decades.

If you chose the United States dividend cash flow on bitcoin zero cash flow, you’ve secured a stream of income for life. This is far better than people playing in speculative and manipulated markets like crypto. The result for them will likely be the opposite of financial independence.

Michael Foster is the Principal Research Analyst for Opposite perspectives. For more revenue ideas, click here for our latest report »Indestructible income: 5 advantageous funds with stable dividends of 10.2%.”

Disclosure: none