More Income for You, More Often
By Dr. Steve Sjuggerud
May 2, 2008
Right now, we have a rare opportunity...
We can get paid a monthly double-digit dividend... We can buy in for only 85 cents on the dollar... And we can have the skills of a legendary investment manager behind us.
It could lead us to a 60%+ return in two years. Let me show you how...
David Dreman made one of the greatest calls in stock market history. In 1980, Dreman told investors to buy stocks.
Dreman didn't just tell a few clients or friends to buy stocks. He literally wrote the book on buying stocks in 1980. He called it Contrarian Investment Strategies. And he said, "The stock market appears cheap by nearly every historical standard."
Saying "buy stocks" was bold stuff. Stocks hadn't made money in 17 years. But Dreman was absolutely right. After 17 years of losses, the stock market started the longest bull run in recorded history, which stretched from 1982 until 2000.
Fast forward to 2008. Dreman is guarded, but optimistic again. In the upcoming issue of Forbes (dated May 5) he says: "Frightening as the markets look today, there will come a time when the liquidity crisis ends and today's prices for bank stocks look, in retrospect, like bargains."
---------- Advertisement ----------
BANNED ON WALL STREET
Dr. George Huang - a PhD trader and former VC – has uncovered a small subsection of the financial markets offering tremendous returns – and which Wall Street CANNOT touch.
According to Dr. Huang's 8-year back-testing study, this small group of 69 companies outperformed the NASDAQ 6-to-1 over an 18 month period.
For more information, click here.
-----------------------------------
Today we have a unique opportunity to invest with David Dreman. It's not often that you can get in with one of history's great investment managers at 85 cents on the dollar... and potentially pocket more than 60% gains in two years. But we can today, through the Dreman Value Income Edge Fund (DHG).
Dreman's fund is a safe play. It pays 11.67 cents a month in dividends ($1.40 per year). Always has. As of the end of April, the fund's price was $13.69, so the dividend yield on the fund is over 10%.
Interestingly, the actual value of the stocks and bonds the fund holds is $16.07 per share (as of the end of April). So by buying in at $13.69, we're able to buy in at a 15% discount.
Dreman's Value Income Edge Fund is a bit of a strange beast...
The goal of the fund is maximum returns with minimum variability. That's exactly the way I want to invest. Dreman isn't just sitting in stocks, waiting for them to go up. To achieve his goal, Dreman invests in a unique way...
He invests roughly 65% in bonds and 65% in stocks. You're probably thinking, "That math doesn't add up." You're right. David balances it out with a 30% "short" position in stocks.
David splits his stock positions: half long, half short. And sometimes he borrows a little bit of money to leverage his gains. So he has three strategies going on at once... an income strategy (bonds), a "long" strategy, and a "short" strategy.
The goal, of course, is to minimize risk.
The income strategy portion helps pay the big dividend. The stock strategy – where David buys extremely undervalued stocks – will provide significant gains when the market gets going again. And the short strategy should continually add a few percentage points per year to our returns.
So here's how we get to 60% in two years...
| 1. |
Let's say David can grow the fund's underlying value by 10% per year. So $16.07 growing at 10% per year is roughly $19.44 two years later. |
| 2. |
Now let's assume that the foolish investors who sold in a panic regain their composure, and the fund moves from trading at a huge discount to trading at its fair value – $19.44 in two years' time. |
| 3. |
Then, let's assume the dividend grows at 5% per year. Over two years, we'd earn a total of $3 in dividends. |
So if we could buy today at $13.69, and realize $22.44 (that's $19.44 plus $3 of dividends), we'd make more than 60% – safely – in two years.
Dreman can do better than that. With nearly four decades of experience, he knows what he's doing.
It's not often we can buy David Dreman's management for 85 cents on the dollar – and earn a 10% dividend yield. So you ought to consider the Dreman Value Income Edge Fund today... with the conservative goal of earning a safe return of 60% over the next two years.
Better yet, you should consider our Monthly Dividend Program. Right now, Dreman's Value Income Edge Fund is in our Monthly Dividend Program's Top 10 list... along with nine more of the best high-yield opportunities that will pay you monthly dividend checks.
Good investing,
Steve
P.S. Funds like Dreman's are one of the great tools of the Monthly Dividend Program. It's a quick course that provides a list of the 10 best monthly income opportunities in the world and teaches you how to find other opportunities for yourself. Click here for the details on how to sign up.
| 
