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Beware of New Fees to Own ADR Shares

by Fred Fuld III

ADRs (American Depositary Receipts) are financial instruments that allow U.S. investors to invest in foreign companies without needing to purchase shares on a foreign exchange. Essentially, an ADR represents a share (or multiple shares) in a foreign company but trades on U.S. exchanges like the NYSE or NASDAQ. Each ADR is issued by a U.S. bank and is backed by actual shares of the foreign company, which the bank holds in trust.

Advantages of ADRs:

Easy Access to Foreign Stocks:
- ADRs provide U.S. investors with an easy way to invest in foreign companies without needing to navigate international stock markets, currencies, or regulations.
Dollar-Denominated:
- ADRs are traded in U.S. dollars, so investors don’t have to worry about foreign exchange transactions or currency conversions when buying or selling shares.
Liquidity and Simplicity:
- Since ADRs are traded on U.S. exchanges, they offer more liquidity and are easier to buy and sell than foreign shares listed on international exchanges.
Regulatory Oversight:
- ADRs must comply with U.S. financial regulations, meaning the foreign companies issuing ADRs often provide financial disclosures in line with U.S. standards. This transparency can give investors more confidence.
Dividends in U.S. Dollars:
- ADR holders receive dividends in U.S. dollars, which simplifies the process and eliminates concerns about currency fluctuations.

Disadvantages of ADRs:

Currency Risk:
- Although ADRs are priced in dollars, their underlying shares are in foreign currencies. Therefore, changes in the foreign exchange rate between the U.S. dollar and the currency of the company’s home country can affect the value of the ADR.
Fees:
- ADRs often come with additional fees, such as custodian or management fees, which can eat into returns. These fees are typically charged by the depositary bank.
Limited Selection:
- Not all foreign companies offer ADRs, meaning investors have access to only a subset of international companies. If you’re interested in smaller or more obscure foreign stocks, ADRs may not be an option.
Regulatory Differences:
- While ADRs are subject to U.S. regulations, the underlying companies are still foreign and may follow different accounting standards or face different political and economic risks compared to U.S. companies.
Liquidity Risks (Depending on the ADR):
- Some ADRs, especially those representing smaller companies, can be less liquid than domestic stocks, making it harder to buy or sell at favorable prices.

In short, ADRs make it easier for U.S. investors to diversify their portfolios internationally, but they come with certain risks and costs that need to be considered.

New Fees:

Now lets talk about fees. I own many ADRs, which I’ve owned for years. Occasionally, I will get charged a foreign tax on a 1099-DIV, but I’ve never been charged a fee – that is, until now.

I recently received a bill from Bank of New York Mellon for an assessment of an annual depository service fee for one of my stocks that I own as an ADR, Bayer (BAYRY). The fee isn’t large but it’s a nuisance, and it is something I’ve never had to pay before, even though I’ve owned the stock for many years. BNY gives me the option of paying by check or wiring of the funds.

I called BNY to ask why I am being charged this fee when I haven’t been charged for it in the past, and the customer service rep said that previously the fee was deducted from my dividends. When I told her that dividends were paid on the stock this year (ex-dividend in April, payable in May), which provided more than enough to cover the fee, she checked into it and said that this was something new that the company (Bayer) implemented.

When asked what would happen if I didn’t pay the fee, I was told that a portion of my shareholdings would be sold to cover it.

My last question was if there were any other of my stocks that BNY is the depository for where a fee is now being assessed, and she said none of my other stocks that BNY is handling.

So when looking for ADRs to buy, especially if you are a large investor or an institution, beware of the depository service fee. Check with the stock’s transfer agent or depository agent.

Disclosure: Author owns BAYRY.

Top Dividend Paying Gold Mining Stocks

by Fred Fuld III

4 minute read time

Gold has long been prized for its value and versatility, serving both as a store of wealth and a key material in various industries. As a precious metal, gold has traditionally been used to hedge against inflation, providing stability to investors during times of economic uncertainty. Its intrinsic value, resistant to the erosive effects of inflation, makes gold a safe haven when currencies fluctuate or geopolitical risks rise. Beyond its monetary significance, gold has numerous applications, ranging from jewelry and electronics to medicine and aerospace. This enduring demand across sectors ensures that gold remains a valuable asset, even as economies shift.

For investors seeking income as well as exposure to the gold market, dividend-paying gold mining stocks offer a unique opportunity. While gold itself does not generate cash flow, companies that mine gold can distribute profits to shareholders in the form of dividends. Below, we highlight three top gold mining stocks known for their dividend payouts: B2Gold (BTG), Centerra Gold (CGAU), and Gold Fields (GFI). These companies not only benefit from rising gold prices but also reward shareholders with consistent income.

B2Gold (BTG): A Low-Cost Producer with Strong Dividends

B2Gold, based in Canada, is one of the world’s low-cost senior gold producers, with operations in Mali, the Philippines, and Namibia. Known for its disciplined approach to mining, B2Gold has maintained a strong balance sheet and low debt, allowing it to reward shareholders with steady dividends. The company has a market capitalization of approximately $4.1 billion, reflecting its significant presence in the gold mining industry. With a forward price-to-earnings (P/E) ratio of 7.7, B2Gold offers attractive value, especially for investors looking for exposure to the gold market at a reasonable valuation.

What sets B2Gold apart is its commitment to returning capital to shareholders through its dividend program. Currently, the stock has a dividend yield of around 4.8%, making it one of the more attractive income plays in the sector. Despite fluctuations in gold prices, B2Gold’s efficient operations and strong cash flows enable it to sustain its dividend while continuing to invest in growth. For income-focused investors seeking stability, B2Gold is a compelling choice.

Centerra Gold (CGAU): A Diversified Gold and Copper Producer

Centerra Gold is a Canadian-based gold mining and exploration company with operations and projects in North America, Turkey, and Mongolia. Centerra distinguishes itself through its diversified production profile, which includes significant exposure to copper in addition to gold. This diversification provides Centerra with some insulation from the volatility of gold prices, making it a well-rounded investment in the resource sector. The company has a market cap of about $1.5 billion and a forward P/E ratio of 10.3, indicating that the stock is relatively inexpensive compared to its earnings.

Centerra Gold offers a dividend yield of approximately 2.9%, providing investors with a reliable income stream. The company’s ability to generate cash flow from both gold and copper production helps support its dividend payments, even in challenging market conditions. While Centerra has faced operational challenges in the past, particularly at its Kyrgyz Republic operations, it has worked to diversify its asset base and reduce geopolitical risk. For investors seeking a blend of gold exposure with a diversified resource portfolio, Centerra Gold presents an intriguing opportunity.

Gold Fields (GFI): A Global Player with Robust Dividends

Gold Fields, headquartered in South Africa, is one of the largest gold mining companies in the world, with operations spanning South Africa, Ghana, Australia, and South America. The company has built a reputation for its focus on sustainability and operational efficiency, ensuring long-term value creation for its shareholders. With a market capitalization of approximately $13.9 billion, Gold Fields is a major player in the gold mining industry. The stock has a trailing P/E ratio of 22 and a forward P/E ratio of 8.6.

Gold Fields stands out for its commitment to paying dividends, offering a dividend yield of around 2.5%. The company has a history of adjusting its dividend payments to reflect profitability, which allows it to maintain a healthy balance sheet while still rewarding shareholders. As a global producer, Gold Fields benefits from diverse geographical exposure, reducing the risks associated with operations in any single region. For investors looking for a large, stable gold mining company with a solid dividend, Gold Fields is a strong contender.

Conclusion

As gold continues to serve as a hedge against inflation and economic instability, gold mining companies offer a unique way for investors to benefit from rising gold prices while also earning income through dividends. B2Gold, Centerra Gold, and Gold Fields represent three top dividend-paying gold miners, each with its unique strengths. B2Gold provides low-cost production and a high yield, Centerra offers diversification through copper, and Gold Fields delivers global exposure and robust dividends. For investors seeking both growth potential and income, these gold mining stocks are worth serious consideration.

Disclosure: Author didn’t own any of the above at the time the article was written.

Investing in Income: High-Yield BDC Stocks to Watch

by Fred Fuld III

Business Development Companies (BDCs) are unique investment vehicles designed to support small and mid-sized businesses by providing them with capital. These firms typically operate similarly to private equity funds, investing in a range of companies at various stages of development.

The primary aim of BDCs is to generate income for their shareholders, which they do primarily through dividend payouts. Given their structure and regulatory requirements, BDCs must distribute at least 90% of their taxable income to shareholders, making them attractive options for income-seeking investors. Here, we explore some of the top BDC stocks based on their dividend yields: TriplePoint Venture Growth BDC (TPVG), TCP Capital Corp. (TCPC), OFS Capital Corporation (OFS), and Runway Growth Finance Corp. (RWAY).

TriplePoint Venture Growth BDC (TPVG) has established itself as a prominent player in the BDC sector, focusing on providing financing solutions to venture capital-backed companies. As of recent financial reports, TPVG has demonstrated robust growth, driven by its strategic investments in high-growth sectors.

The company’s quarterly dividend is competitive, with a current yield hovering around 17%, including bonus dividends. Recent financial results indicate that TPVG’s net investment income has been on the rise, reflecting its effective portfolio management and the strong performance of its underlying investments. Earnings per share grew 57% year over year. The stock is trading at 78% of book value, however, it has a very low market capitalization of $274 million.

With its commitment to supporting innovative businesses, TPVG is well-positioned to continue generating substantial returns for its investors.

TCP Capital Corp. (TCPC), with a market cap of $695 million, is another noteworthy BDC, known for its focus on investing in middle-market companies. The firm has been successful in maintaining a consistent dividend payout, currently offering a trailing yield of approximately 16.75%%, which includes extra dividends. Recent earnings reports highlighted TCP’s solid credit quality and prudent investment strategy, which have contributed to a stable income stream. The stock is trading at 80% of book value.

Furthermore, the company has been actively managing its portfolio to mitigate risks associated with economic fluctuations. TCP’s commitment to its shareholders is evident through its history of regular dividend increases, making it an appealing choice for those looking for reliable income.

OFS Capital Corporation (OFS) specializes in providing debt and equity financing to small and mid-sized businesses, particularly in the United States. With a current dividend yield nearing 16.6%, OFS stands out for its consistent payout history and focus on credit quality. Recent financial disclosures revealed that OFS has maintained a healthy balance sheet, with a diversified investment portfolio that mitigates risk while capturing growth opportunities. The stock is selling for 71% of book value.

The company’s proactive approach to portfolio management and its emphasis on generating stable income make it an attractive option for dividend-focused investors. However, the company has a market cap of only $110 million, which is extremely low and should be considered very speculative.

Runway Growth Finance Corp. (RWAY) rounds out our list, catering to growth-stage companies in technology and other high-growth sectors. It has a fairly low market cap of $395 million.

RWAY offers an appealing dividend yield of around 15.6%, backed by its strategic investments in innovative firms poised for expansion. Recent financial performance shows that Runway has successfully navigated market challenges, maintaining a solid net investment income and a diverse portfolio. The price to book ratio is 0.78.

Runway’s focus on sustainable growth and consistent dividend payouts makes it a valuable addition to any income-seeking investor’s portfolio.

In conclusion, BDCs like TriplePoint Venture Growth BDC, TCP Capital Corp., OFS Capital Corporation, and Runway Growth Finance Corp. offer investors attractive dividend yields while supporting the growth of small and mid-sized businesses. As always, potential investors should conduct thorough research and consider market conditions before investing.

Disclosure: Author didn’t own any fo the above at the time the article was written.

Mini Bonds: A Small Investment with Big Potential

by Fred Fuld III

Mini bonds have gained popularity among investors due to their affordability and accessibility. These bonds, often referred to as notes, typically trade for around $25 on the NYSE and NASDAQ. They offer a unique opportunity to invest in debt securities at a fraction of the cost of traditional bonds, which normally trade in $1000 denominations with a $5000 minimum.

One of the most significant advantages of mini bonds is their low entry point. For investors with limited capital, these bonds provide a way to diversify their portfolios without breaking the bank. By investing in a variety of mini bonds, investors can spread their risk across different issuers and sectors, potentially reducing their exposure to market volatility.

Another benefit of mini bonds is their liquidity. As they trade on major exchanges, investors can easily buy and sell these bonds, ensuring that they can access their capital when needed. This liquidity can be particularly valuable in times of market uncertainty, as investors can quickly liquidate their positions to meet their financial obligations.

Mini bonds have a big advantage over preferred stocks, because the bonds will eventually be paid off at maturity.

However, while mini bonds offer several advantages, it’s essential to consider potential drawbacks. All bonds can drop in value when interest rates rise. Also, investors should carefully evaluate the creditworthiness of the issuers before making an investment.

Additionally, mini bonds may have limited trading volume compared to stocks. This can sometimes lead to wider bid-ask spreads, which can impact the overall return on investment if sold before maturity.

Here are some examples of a few muni bonds:

Southern Company Series 2020A 4.95% Junior Subordinated Notes due January 30, 2080 (SOJD) 5.07% yield.

Southern Company (The) Series 2020C 4.20% Junior Subordinated Notes due October 15, 2060 (SOJE) 4.79% yield.

Assurant, Inc. 5.25% Subordinated Notes due 2061 (AIZN) 5.82% yield.

Stifel Financial Corporation 5.20% Senior Notes due 2047 (SFB) 5.44% yield.

Brookfield Finance Inc. 4.625% Subordinated Notes due October 16, 2080 (BNH) 5.88% yield.

Babcock & Wilcox Enterprises, Inc. 8.125% Senior Notes due 2026 (BWSN) 8.65% yield.

In conclusion, mini bonds offer a unique investment opportunity for both experienced and novice investors. Their affordability, liquidity, and potential for diversification make them an attractive option for those seeking to build a well-rounded portfolio. However, investors should be aware of the potential risks associated with these bonds, such as credit risk and limited trading volume. By conducting thorough research and carefully considering their investment goals,investors can make informed decisions about whether mini bonds are a suitable addition to their financial strategy.

Disclosure: Author didn’t own any of the above at the time the article was written.

Stocks Going Ex Dividend in October 2024

The following is a short list of some of the many stocks going ex-dividend during the next month, which can be helpful for traders and investors interested in the stock trading technique known as “Buying Dividends” or “Dividend Capture.” This strategy involves purchasing stocks before the ex dividend date and selling them shortly after the ex-date at a similar price, while still being eligible to receive the dividend payment.

Although this technique generally proves effective in bull markets and flat or choppy markets, it is advisable to exercise caution and consider avoiding this strategy during bear markets. To qualify for the dividend, it is necessary to buy the stock before the ex-dividend date and refrain from selling it until on or after the ex-date.

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date can be delayed by up to two months after the ex-date.

For investors seeking a comprehensive list of stocks going ex-dividend in the near future, WallStreetNewsNetwork.com has compiled a downloadable list containing numerous dividend-paying companies. Here are a few examples showcasing the stock symbol, ex-dividend date, periodic dividend amount, and annual yield.

Cardinal Health, Inc. (CAH)	10/1/2024	0.5056	1.84%
JP Morgan Chase & Co. (JPM)	10/4/2024	1.25	2.36%
Mastercard Incorporated (MA)	10/9/2024	0.66	0.54%
Toll Brothers, Inc. (TOL)	10/11/2024	0.23	0.60%
Phillips Edison & Company, Inc. (PECO)	10/15/2024	0.1025	3.20%
CVS Health Corporation (CVS)	10/21/2024	0.665	4.58%
Lowe’s Companies, Inc. (LOW)	10/23/2024	1.15	1.73%
Coca-Cola Consolidated, Inc. (COKE)	10/25/2024	2.50	0.77%

To access the entire list of over 100 ex-dividend stocks, subscribers will receive an email in the next couple days with the full list. If you are not already a subscriber, you can sign up using the provided signup box below. Don’t miss out on this valuable information, and the best part is that it’s free!

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Declaration date: This refers to the day when a company announces its intention to distribute a dividend in the future.
Ex-dividend date: On this day, if you purchase the stock, you would not be eligible to receive the upcoming dividend. It is also the first day on which a shareholder can sell their shares and still receive the dividend.
Record date: This marks the day when you must be recorded on the company’s books as a shareholder to qualify for the dividend. Typically, the ex-dividend date is set two business days prior to the record date.
Payment date: This is the day on which the dividend payment is actually made to the eligible shareholders. It’s important to note that the payment date can be as long as two months after the ex-date.

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

In conclusion, being aware of the stocks going ex-dividend can be advantageous for traders and investors employing the “Buying Dividends” strategy. WallStreetNewsNetwork.com provides a convenient resource to access a comprehensive list of such stocks, allowing individuals to plan their investment decisions effectively. Remember to stay informed and consider market conditions before employing any investment strategy.

Disclosure: Author didn’t own any of the above at the time the article was written.

Warren Buffett Adds New Stocks to Berkshire Hathaway’s Portfolio

by Fred Fuld III

3 minutes read time

Warren Buffett, often referred to as the “Oracle of Omaha,” has long been regarded as one of the most successful and astute investors in modern history. As the chairman and CEO of Berkshire Hathaway (BRK-A) (BRK-B), Buffett has built a reputation for making strategic, long-term investments that have paid off handsomely. His investment philosophy revolves around purchasing undervalued companies with strong fundamentals and holding onto them for the long haul.

Each year, investors eagerly await Buffett’s moves, as his decisions have the potential to signal broader market trends. In a surprising turn of events earlier this year, Buffett made new additions to Berkshire Hathaway’s vast portfolio by purchasing shares in two companies—Ulta Beauty (ULTA) and HEICO Corporation (HEI) (HEI-A).

Ulta Beauty, a leading retailer of cosmetics, skincare products, and salon services, is a particularly interesting choice for Buffett. Known for its wide selection of both high-end and mass-market beauty products, Ulta has managed to carve out a dominant space in the beauty industry. Despite the broader economic challenges affecting retail businesses, Ulta has continued to show resilience, driven by strong consumer demand for beauty products and an innovative omni-channel strategy that integrates online shopping with in-store experiences.

The company’s focus on customer loyalty through its popular rewards program has also helped to secure a dedicated customer base. For Buffett, a renowned value investor, the decision to invest in Ulta may reflect his confidence in the beauty industry’s growth potential and the company’s ability to withstand market fluctuations.

Ulta stock has a trailing and forward price to earnings ratio of 15. Although quarterly earnings per share tanked by 12% year-over-year, annual earnings are expected to grow by 7.9% next year. The return on equity is about 55%. The stock, with a market cap of $17.8 billion, does not pay a dividend.

HEICO Corporation, on the other hand, represents a different sector altogether. Specializing in aerospace and defense technology, HEICO is a leading producer of parts for aircraft, satellites, and defense equipment. The company has established a strong reputation for providing cost-effective and innovative solutions to the aerospace industry, an area of increasing importance given the ongoing global demand for air travel and advancements in space exploration.

HEICO’s unique position as a supplier to both commercial and military sectors makes it an appealing investment for long-term growth, particularly as governments and private companies alike invest in expanding their aerospace capabilities. For Berkshire Hathaway, HEICO fits the mold of a company with strong fundamentals and a clear path to future growth.

The stock has a trailing P/E of 76 and a forward P/E of 61, and pays a small dividend of 21 cents a share. This $36 billion market cap company sports earnings per share growth this year of over 25% with a growth rate next year of almost 17%. Sales growth jumped 43% year-ver-year. Return on equity is currently 14.8%.

Buffett’s investments in Ulta Beauty and HEICO Corporation are notable not just because of the companies themselves, but because they signal a broader strategy of diversification within Berkshire Hathaway’s portfolio. By investing in a beauty retailer and an aerospace company, Buffett appears to be hedging against risks in the broader economy, while also tapping into industries with significant growth potential. As always, Buffett’s moves have sparked considerable interest, with investors eager to see how these new additions will perform in the years to come. While only time will tell whether these investments will yield the same success as some of his previous picks, it’s clear that even at 93 years old, Warren Buffett remains as sharp as ever in identifying promising opportunities.

Disclosure: Author didn’t have any positions in any of the above stocks at the time the article was written.

Unlocking Income Potential: Top High Dividend Stocks in the Dow to Consider Now

by Fred Fuld III

Investing in high dividend stocks can be an attractive option for income-seeking investors, especially in uncertain economic times. Dividend-paying stocks offer the dual benefit of regular income and potential capital appreciation, providing a cushion during market volatility.

Given current economic uncertainties, such as inflation and interest rate fluctuations, high dividend stocks can act as a safer harbor for conservative investors looking to balance risk with reward. As companies with strong cash flow generation, they often maintain or grow dividends, offering a hedge against inflation. Among the 30 stocks that make up the Dow Jones Industrial Average, Chevron (CVX), Dow Inc. (DOW), and Verizon (VZ) stand out for their robust dividend yields, making them appealing choices for those seeking reliable income streams.

Chevron Corporation (CVX), one of the largest integrated energy companies in the world, currently offers a dividend yield of around 4.6%. As of the most recent financial data, Chevron has a market cap of approximately $257 billion and a trailing P/E ratio of around 14. Chevron’s strong dividend is backed by its solid cash flows, driven by its oil and gas production activities. Despite the energy sector’s volatility, Chevron’s disciplined capital spending and focus on shareholder returns have helped it weather periods of low oil prices. In 2023, Chevron’s earnings benefited from higher oil prices due to global supply constraints and growing demand, helping the company continue its record of paying dividends for over a century. Its forward-looking strategy of expanding into renewable energy while maintaining core oil and gas operations positions Chevron well for both stability and future growth.

Another top yielding Dow stock is Dow Inc. (DOW), a global leader in chemicals and materials, currently provides a dividend yield of around 5.6%. Dow’s market cap stands at roughly $35 billion, and it has a trailing P/E ratio of 35, but a very favorable forward P/E of 13.5. The company’s portfolio includes essential products in sectors ranging from packaging to construction, making it a critical player in various global supply chains. In recent quarters, Dow has seen some pressure due to softening demand in certain sectors, particularly housing and industrial production, leading to reduced earnings. However, the company remains committed to rewarding shareholders through dividends, supported by its ability to generate cash flow even in challenging environments. As the global economy stabilizes, Dow’s strong balance sheet and diversified product line should enable it to maintain its high dividend, while potential improvements in demand for its products could further support share price appreciation.

Verizon Communications (VZ), a giant in the telecommunications industry, is known for its reliable, income-generating potential, offering a dividend yield of about 6%. Verizon’s market cap hovers around $187 billion, and its trailing P/E of 17 and a forward P/E ratio of approximately 9. The company’s stock price has faced challenges in recent years due to stiff competition in the telecom space and increased capital expenditures related to 5G infrastructure rollout. However, Verizon’s stable, recurring revenue from its wireless and broadband services provides the financial flexibility needed to continue paying high dividends. With the ongoing expansion of its 5G network, Verizon aims to capitalize on new growth opportunities in areas like the Internet of Things (IoT) and edge computing. While growth may be moderate, Verizon’s consistent cash flow from its massive subscriber base should allow it to maintain its attractive dividend, making it an appealing choice for income-oriented investors.

In conclusion, investing in high dividend stocks like Chevron, Dow, and Verizon offers a compelling opportunity for income-focused investors. Each company has its own unique strengths and challenges, but their consistent cash flows, solid dividend yields, and market positions make them attractive options for those looking to balance income and growth potential in their portfolios. These stocks, while not without risks, provide a relatively stable investment in an increasingly uncertain market environment.

Disclosure: Author didn’t have any positions in any of the above at the time the article was written.

8 Ways to Trade Tesla Stock Using ETFs (and without using options)

by Fred Fuld III

2 minute read time

Did you know that there are eight different ways to trade Tesla (TSLA) using ETFs, and without using options?

That’s right. In addition to just buying and shorting the Tesla stock, there are other ways to speculate on the price of Tesla.

These ETFs are especially useful for those who do not want to trade options or are not eligible to trade options. These are also beneficial to traders who want to short TSLA in their IRA account (in which shorting is prohibited).

So what are the alternatives?

Here’s an overview of the Tesla ETFs, all of which track Tesla (TSLA) with varying leverage or inverse positions:

AXS TSLA Bear Daily ETF(TSLQ): This fund provides 2x inverse (-200%) exposure to Tesla’s daily performance. It is a short-term tool for sophisticated investors who want to profit from Tesla’s price decline. It carries a 1.15% expense ratio, and due to its high volatility (361.41% over 5 days), it’s intended for daily rebalancing(GraniteShares).
YieldMax TSLA Option Income Strategy ETF (TSLY): This ETF seeks to generate monthly income by selling covered call options on Tesla stock. It is an income-focused strategy rather than a leveraged or inverse play(ETFdb).
Direxion Daily TSLA Bull 2X ETF (TSLL): This fund offers 2x the daily performance of Tesla’s stock. Like other leveraged ETFs, it’s designed for short-term traders and rebalances daily. It carries a higher risk due to its leverage(ETFdb).
GraniteShares 1.5X Short TSLA Daily ETF (TSDD): Aims to deliver 1.5x inverse (-150%) of Tesla’s daily returns. This is a tool for shorting Tesla’s price moves with moderate leverage(GraniteShares).
GraniteShares 1.75X Long TSLA ETF (TSLR): This ETF targets 1.75x the daily performance of Tesla’s stock, providing bullish investors with leveraged exposure(GraniteShares).
T Rex 2X Inverse TSLA Daily Target ETF (TSLZ): Offers 2x inverse (-200%) exposure, designed to short Tesla’s price movements on a daily basis. It’s useful for those expecting Tesla’s stock to decline(GraniteShares).
T Rex 2X Long TSLA Daily Target ETF (TSLT): A bullish play offering 2x Tesla’s daily performance, similar to TSLL but with slightly different mechanics(GraniteShares).
GraniteShares 1.25X TSLA Daily ETF (TSL): Provides 1.25x exposure to Tesla’s daily performance, allowing for moderate bullish leverage(ETFdb).

Keep in mind, these ETFs are complex and carry high risks, especially the leveraged and inverse funds, which are typically used for short-term trading strategies rather than long-term investments.

Disclosure: Author has a small long position in TSLA. (Small means way less than 100 shares.)

A Dozen Ways to Survive a Bear Market

by Fred Fuld III

It looks like we may be at the beginning of a bear market. If you want to profit from falling markets stock prices, there are several ways to do so.

Many strategies are available to profit from a bear market and a stock market crash, some of which are speculative, and some that don’t have much risk. It doesn’t matter what your account size is, there are ways to protect yourself, and even profit on the downside. Here are some of those techniques.

1. Sell a Vertical Call Option Spread

This strategy is a little complicated, but I listed it first, because it is one of the least risky, since your losses are limited, unlike many of the other techniques listed here. In addition, I listed it at the beginning, because I use this trading technique all the time.

If you are familiar with options, then selling a vertical call spread is a great way to make money when a stock drops while protecting yourself if the stock goes up. (This happens to be my favorite strategy.)

This involves shorting an out of the money call option and buying a further out of the money call option at the same time. If the stock drops or stays the same, you make money from the short call which exceeds the loss on the long call. If the stock goes up to the strike price of the short call, you still make a profit. It is only when the stock rises above the strike price of the short call that you begin losing money.

To make it simple, here is an example:

Stock is at 50

Sell (short) one call with a strike price of 51 for 3 (an option that is trading at 3 means $300)

Buy one call with a strike price of 52 for 1 ($100)

If the stock drops to 45, the 51 call drops to $0 and you make $300 because you shorted it, and the 52 call drops to $0 losing $100 because you own or were long it, netting you a profit of $200.

If the stock rises from 50 to 100, you lose $4900 on the 51 call that you shorted, but you make $4800 on the one that you bought, so you only lose $100.

Generally, you want to use options that expire in 40 to 60 days, and close out your position in 15 to 25 days.

Disadvantages of the selling a vertical call spread

Your profit is limited
You need approval from your broker to do option spreads
Both legs of the spread need to be placed simultaneously (easy to do with most trading platforms)
May need to wait 25 or 30 days to see a profit

2. Shorting Stocks

This is one of the most speculative ways of making money in a bear market. In simple terms, you make money when the stock goes down and you lose money when the stock goes up. What technically happens is that you borrow the shares and immediately sell them (this all is done electronically through your brokerage firm) and since you owe those shares, you eventually have to buy them back at some price, hopefully a lower price, in order to return those shares. The difference between your sale price and eventual purchase price is your profit (or loss, if you buy back at a higher price).

Can you make a lot of money shorting stocks in a bear market? Yes. Is it speculative? Very. Can you lose a lot? Most definitely. This is why it is so risky. When you short a stock, the lowest point it can drop to is zero. Whereas, if the stock goes up, the amount it can rise is unlimited. Let’s say you short 100 shares of a stock at $20 a share. If you put up funds equal to 100% of the value of the shorted amount, and the stock drops to zero, you’ve made a 100% return. However, suppose the stock goes from 20 to 100, you end up losing 400% of your money with lots of margin calls along the way. This is called a short squeeze. But even on a short term basis, an investor can lose money very fast.

Unfortunately for those who do their trading in retirement accounts, such as IRAs, shorting stocks is not allowed.

So in summery, do I think you should short stocks? Absolutely not, unless you are a professional trader. The risk is almost infinite. If you understand options real well, hedged short selling might be OK (see the next strategy), as long as you are an advanced trader, and know what you’re doing.

3. Hedged Short Selling

Hedged short selling is a strategy whereby you short a stock and at the same time, you buy a close-to-the-money call option. That way, if the stock shoots up, you are protected with the call option. If the stock drops, you will lose what you paid for the option, but you will make money on your short stock position.

Example: you short 100 shares of a stock that is currently trading at 50 (so you short $5000 in stock), and you buy a call option with a strike price of 52 for 1 ($100).

The stock goes to 40. You make $1000 from the stock dropping from 50 to 40, and you lose the $100 you paid for the call option, with a net profit of $900.

The stock stays the same at 50. You don’t make any money on the short sale fo the stock and you lose $100 on the call option for a net loss of $100.

The stock goes up to 60. You lose $1000 on the short stock, but the value of the call option will increase from 1 to 10 ($100 to $1000), netting $900 on the difference, for an overall loss of $100.

In other words, in the example above, you can only lose $100, if the stock stays the same or goes up, but if the stock drops, the profit can be substantial.

Actually, to be more accurate, if the stock goes to 51 and stays there, you will lose $100 on the short stock sale and $100 on the call option, for a total maximum loss of $200. Even still, it may be worth the small loss in case you are wrong about a bear market.

Disadvantages of the hedged short selling

You need approval from your broker to short stock and buy options
Both positions should be placed simultaneously (easy to do with most trading platforms)

4. Short (Bearish) ETFs

The Exchange Traded Fund known as the Bearish ETF or Short ETF is another option. What these ETFs do is provide a return opposite to the return of the index, sector, or industry that it is tracking.

For example, the Short Dow30 ProShares (DOG) provides a return that is the inverse of the Dow Jones Industrial Average. If the Dow goes down 2%, the DOG is expected to up 2%. The Short QQQ ProShares (PSQ) ETF gives a return that is the inverse of the NASDAQ 100 Index.

The nice thing about these short ETFs is that your losses are limited. Also, if you are long individual stocks that you don’t want to sell, these can be good for protecting your overall portfolio on the downside.

5. Leveraged Bearish ETFs

If you like volatility, you will love the leveraged bearish ETFs. What these ETFs do is provide double, and in some cases triple the inverse return of indices.Some examples include the UltraShort Consumer Services ProShares (SCC) and the ProShares UltraShort S&P S&P 500 (SDS).

In addition there are several triple leveraged bearish ETFs. Direxion Daily MCSI Real Estate Bear 3X Shares (DRV), Direxion Daily Energy Bear 2X Shares (ERY), and ProShares UltraPro Short Russell 2000 (SRTY) are just a few of the many leveraged bearish ETFs.

The volatility of these ETFs is substantial, and so are the wide bid and asked spreads that I’ve seen occasionally.

The advantage of these trading vehicles is that they are a way of shorting on margin, with a limit on the downside. The disadvantage is that the losses can be quick and large, especially with the triple leverage short ETFs.

6. Bear Funds

It may be hard to believe, but there are actually a large number of bearish mutual funds for the long term bearish investors. These include the Grizzly Short Fund (GRZZX), the PIMCO StocksPlus TR Short Strategy Institutional Fund (PSTIX), and the ProFunds Bear Investors Fund (BRPIX). These funds have minimum investments ranging from $1,000 to $5,000,000.

7. Puts

First, a little about option pricing. Puts and calls are priced on a per share basis, so a put at $1 would cost $100 for a 100 share option, or a call at $3.50 would cost $350.

A put is the option to put your stock to someone at a particular price within a certain period of time. In other words, if you own a stock that is trading at 22 and you buy a put at a dollar which gives you the right to put your stock to someone at $20 per share within three months, there are a couple of things that could happen. The stock could tank to $14 a share and you could put your stock at 20, or just resell the put for 6 (the difference between 14 and 20) and collecting the profit. You would be far better off than just doing nothing. And if the stock goes up or stays about the same, you are just out your $100 for the option. Puts can be useful for experienced traders.

8. Cash

There is another way to make money in a bear market. Sell everything, and keep your money in cash, with the safest way being a T-bill money market fund, that only owns T-bills. (Money market funds that invest in repos are supposed to be just as safe, but I consider them slightly more risky than T-bills.) The advantages are that you can’t lose money and you can receive an income from the investment.

The alternative cash investment is putting your money in a bank certificate of deposit or savings account. Your money is safe up to the FDIC limits, but the interest rate will be very low.

9. Anti ETFs (Bearish ETF of Popular Bullish ETFs)

The Anti-ETF is a new investment vehicle that has cropped up recently. The goal of these ETFs is to provide the reverse return of another popular actively managed exchange traded fund, as opposed to the bearish ETF which attempt to track the inverse of an index, like the ProShares Short S&P500 ETF (SH).

The most popular is the Tuttle Capital Short Innovation ETF (SARK), which has a goal of achieving the inverse of the return of the popular ARK Innovation ETF (ARKK) managed by Cathie Wood.

10. Anti Stocks (Bearish Single Stock ETFs)

Maybe there is a stock you want to short, but you don’t qualify for an account that allows shorting. Or maybe you want to short a stock in a retirement plan, such as an IRA. If you want to short a particular stock, such as Tesla, Nvidia, Paypal, Pfizer, or Nike (the AXS 2X NKE Bull Daily ETF (NKEL) would have been a good one today as it was down 12% today 9/30/22), there are ETFs which have a goal of returning the opposite return of a particular stock.

11. Series I Bonds

If you think the bear market will last for a year or more, Series I bonds are the way to go. These bonds never drop in value and currently pay 9.62%. Plus, they are backed by the U.S. Government. For more information on these bonds, check out the article Series I Bonds Now Paying over 9%.

12. Selling Calls Against the Stocks You Want to Hold

You may have stocks in your portfolio that you want to keep fr one reason or another, such as not wanted to take a huge capital gain. In that case, you might want to consider writing calls against those stocks.

As you can see , you have plenty of options (no pun intended) for making money and preserving your capital in a bear market. There are obviously additional risks involved with shorting stock and options, which you need to delve into with your broker before utilizing those strategies. If we are in a bear market, hopefully you can protect your portfolio and make some money on the downside.

Author does not own any of the above mentioned securities.

Stocks Going Ex Dividend in September 2024

However, it is important to note that the actual dividend may not be paid for several weeks, as the payment date can be delayed by up to two months after the ex-date.

Nike, Inc. (NKE)	9/3/2024	0.37	1.78%
Bank of America Corporation (BAC)	9/6/2024	0.26	2.59%
Fidelity National Information Services, Inc. (FIS)	9/10/2024	0.36	1.97%
Macy’s Inc (M)	9/13/2024	0.1737	4.46%
Horizon Technology Finance Corporation (HRZN)	9/16/2024	0.11	11.99%
Royal Caribbean Cruises Ltd. (RCL)	9/20/2024	0.40	0.96%
Mercer International Inc. (MERC)	9/25/2024	0.075	5.03%
Humana Inc. (HUM)	9/30/2024	0.885	1.01%

Dividend Definitions

To better understand the dividend-related terms, let’s define them:

Before implementing the “Buying Dividends” technique, it is crucial to reconfirm the ex-dividend date with the respective company to ensure accuracy and avoid any unexpected changes.

Disclosure: Author owns BAC.