Replies to post #238 on High-yield/macroeconomics (fka YIELD)

[jimmyh]

Collars and Leverage...

rfj,

would love to hear the concept on collars, although for me I think the quick gains and being in and out of positions work best.

My thought process is to capture 2 or 3 dividends a quarter rather than just one and we can do this by buying just before ex dividend date and selling shortly thereafter like I did on CSE. Then put that money back to work and get another dividend that month or the month after...Beats waiting 3 months for the next dividend.

Also, I've always been a little nervous on using leverage (margin) but maybe that's "old school" and might be missing some opprtunities and better returns...Would love a brief "LEVERAGE 101" education.

What happens when the dividend stocks we buy on margin go down?... although leverage can increase returns, how do you manage the risk if we get hit hard by a bear market for a year or two?

Appreciate your thoughts or anyone elses on Collars and Leverage.

Thanks... Jim