ENHANCED DIVIDEND PORTFOLIO
Managed by John P. Weinstein, CFP®, MBA - Portfolio Manager
Our actively managed ENHANCED DIVIDEND PORTFOLIOS are designed to generate about 6% annual income regardless of interest rates and stock prices. Our goal is to earn substantially greater income than is available in most interest paying investments or a typical stock portfolio. In addition to high income, this portfolio participates in much of stocks upside, but while targeting lower downside risk during market volatility. The portfolio focuses on high and growing dividend stocks as well as other conservative vehicles to grow and protect your income and net worth.
Pays More, Taxed Less
Higher Income - In the current historically low interest rate environment, the 6% targeted income yield is much higher than money markets, CDs, Treasury Bonds, Municipal Bonds or dividends from typical stock portfolios.
Lower Tax Rate - While money market, CDs, and Treasury Bonds are taxed at your highest marginal federal tax rate, equity income is generally taxed at about ½ that rate in the form of qualified dividends and long-term capital gains, and even some tax-free return of capital.
Appreciation and Annual Income Growth
Long-term Appreciation – In most years the Enhanced Dividend Portfolio holdings appreciate in value as well earning income every year even if the stock market is down.
Conservative Approach – With this high-income portfolio, while it may outperform in down, even, or moderate up markets, by avoiding high-growth, high-risk, expensive stocks, it will not have all the upside in a raging bull market.
Insulation from Stock and Bond Market Declines
Time Lowers Market Risk – While this equity dividend approach may feel aggressive for interest rate-oriented savers, a diversified value stock-portfolio has very low long-term risk since down markets are usually book-ended by positive ones. While stock market downturns can be aggressive, they typically last two years or less. Longer term diversified stock investments have very low risk and generally well out-perform fixed savings. In our opinion short-term needed money should not be in stocks, and most longer-term investments should not be in low interest rate CDs, bonds, and money market savings accounts.
Dividends Grow, but Interest is Fixed – Most dividend paying stocks increase their dividends over time, while a 10 year or 30 year bond has a fixed interest rate until maturity. Bonds do not keep up with rising inflation or interest rates.
Bond Risk – While bonds are considered conservative, anyone that has lived through a rising interest rate cycle knows that bond values decrease substantially when interest rates rise. As interest rates inevitably rise, people may be devastated by how much value their "safe" bonds can lose.
Other Benefits
Value Focused - The portfolio holds value and GARP (Growth at a Reasonable Price) stocks, ETFs (Exchange Traded Funds), CEFs (Closed-end Funds) which use conservative covered calls to often generate 6-12% annual income, publicly traded REITS (Real Estate Investment Trusts) and short-term bonds (fixed income).
Fiduciary Model - We are legally as well as morally obligated to put client interests first – removing the conflict of most brokerages and insurance companies that “sell” high commission products such as annuities, unit trusts, or non-publicly traded REITs.
Fee Based – We are exclusively compensated by a small % of assets fee - never accepting other fees/commissions to avoid conflicts of interest – as you do better, we do better. If values go down, we make less.
Tax Efficiency – We minimize taxes by focusing on the best after-tax appreciation and income, taking advantage of tax deductible, reduced tax, tax-free opportunities as well as strategies such as tax loss harvesting to maximize income and net worth.
Active Management – We review client holdings daily using proprietary spreadsheets to take advantage of market volatility, buying low and selling higher as investment opportunities present themselves to maximize net worth & income while striving to reduce risk combing active management to reduce risk with a value - buy & hold approach for the long-term.
Customized Portfolios – Each client is individually considered when buying or selling positions to fit their goals and objectives.
Exemplary Clean Record - No disciplinary action or client complaints filed in an over 20 year industry career https://brokercheck.finra.org/.
Daily Liquid Holdings – We only purchase investments that can be sold any day at market price without any holding or “lock-up” periods or surrender charges.
Free checking (ATM) accounts & No Custodial Fee Retirement Plans - Roth, Traditional, or SEP-IRAs as well as Individual 401(k)s have no inception or annual fees as well as free checking accounts with free ATM usage at virtually any bank (outside bank fees are rebated).
Tax Deductible Individual 401(k)s – These allow small business owners, independent professionals, independent contractors, consultants, Realtors, or 1099 paid employees to contribute in 2020 up to $57,000 and $63,500 at age 50 with a full federal and state tax deduction plus tax deferred growth until distributions are taken with no inception or annual custodial fees.
Reliable Communication - Same day return of calls or e-mails, quarterly e-mail updates on my market outlook and current investment strategy, as well as notes on reasoning of major new purchases and sales, as well as commentary on important positive or negative events that impact our investments.
Free to leave anytime for any reason - While our client turnover is extremely low, you are free to leave anytime with a full refund to the day of any unused quarterly fee.
To learn how Enhanced Dividend Portfolios may fit into your investment strategy, please fill out the form below.
