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Reached for Yield and Got Burned: 3 Rules to Avoid My Mistake

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Dividend of the Week

Reached for Yield and Got Burned: 3 Rules to Avoid My Mistake

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Charles Sizemore,
Co-Editor, Green Zone Fortunes

"More money has been lost reaching for yield than at the point of a gun."

Raymond DeVoe Jr.

I'm thankful that getting robbed at gunpoint is something I've never experienced.

It's one of those traumatic experiences that result in spending years on a psychiatrist's couch.

But I have made the mistake that so many income investors make.

I reached for yield … and got burned.

However, you can learn from my mistake. Here’s how.

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Chart of the Day

Why Investors Should Worry About the Fed’s Balance Sheet Reversal

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Michael Carr,
Editor, True Options Masters

Investors are worried about the Federal Reserve’s commitment to raising interest rates.

Bears worry that the Fed will keep increasing rates until it chokes the economy into recession.

This is a significant concern.

The Fed tends to keep rates high until the economy begins to contract.

Many analysts follow the “three steps and a stumble” rule.

Years ago, traders noticed that stocks sold off after the Fed raised rates three times.

Interest rates are the most visible part of the Fed’s policy.

Today’s chart shows one of the Fed’s other tools: balance sheet reversal.

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1996: The world of hip-hop was forever changed after an unknown assailant shot American rapper and actor Tupac Shakur, who died six days later. Despite his short career, Tupac had an extensive legacy in the rap community and left his mark on modern hip-hop. It’s believed the deadly assault was the result of an ongoing rivalry between the East and West Coast rap scenes.


   


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