A solid opportunity for income generation with historically less risk
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A solid opportunity for income generation with historically less risk

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Since 2011, I have communicated to you my belief that stocks with high dividends and low standard deviations relative to the stock market represent a solid opportunity for income generation with historically less risk than other investment vehicles.  Since then, volatility has continued to rise as uncertainty has flowed from all corners of the globe, leaving investors with few strong growth opportunities. Continued domestic issues, festering problems in the Eurozone, and a marked slowdown from the world’s top performers will likely cause this trend to continue for the foreseeable future.  The unique conditions affecting the market today make this type of investment all the more attractive, depending on each individual’s financial resources, investment goals, risk tolerance, investing time horizon, tax situation and other relevant factors.

  • The first issue to contend with is the nationwide sequestration that began on March 1, 2013. These budget cuts threaten our healthcare system, defense spending, and energy independence. According to the White House, the purpose behind the initial budget cut proposal “was to make [the cuts] so unattractive and unappealing” that a compromise would be forced. Instead, I believe these cuts will deal a blow to our economic recovery.  In New England, our healthcare funding will be reduced by millions of dollars, with 40% of the cuts hitting Massachusetts alone. Army base funding in the New England states will be cut by over $20 million, with Massachusetts and Maine bearing the brunt of the cuts at $8 million each. Finally, shrinking budgets in education and training could hurt 150 New England schools this year. 

 

  • Cyprus has a GDP of approximately $25 billion, or $1 billion less than the GDP of Vermont – the U.S. state with the lowest GDP.  Cyprus’ GDP represents 0.2 percent of the Euro Zone and before the past few weeks it would have been hard to find an individual who could name the capital of the country (solution: Nicosia).   However, Cyprus became the talk of the financial community in February as the government was set to agree to a levy on both uninsured and insured bank deposits in order to receive a bailout from the troika – the International Monetary Fund, the European Commission, and the European Central Bank.  Therefore, contagion could be caused by even the tiniest economies in the world. 

 

 

*The opinions and forecasts expressed are for informational purposes only and may not actually come to pass.  This information is subject to change at any time, based on market and other conditions and should not be construed as a recommendation of any specific security or investment plan.  The representative does not guarantee the accuracy and completeness, nor assume liability for loss that may result from the reliance by any person upon such information or opinions. All investments involve the risk of potential investment losses and no strategy can assure a profit. Past performance is not indicative of future results.

Securities offered through Securities America Inc., Member FINRA/SIPC and advisory services offered through Securities America Advisors, Inc. Armstrong Advisory Group, WRKO and the Securities America companies are unaffiliated. Representatives of Securities America, Inc. do not provide legal or tax advice. Please consult with a local attorney or tax advisor who is familiar with the particular laws of your state. 4/13

DC Dialogue: Sequestration Cuts in New England. 24 Mar 2013. NECN. 4 April 2013. 
Harrison, Edward. Euro Zone GDP By Country. 11 May 2012. 4 April 2013.