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Dividend Investing vs Options Income Strategy – 3Fs Strategy (Guest Post)

Dividend Investing vs Options Income Strategy – 3Fs Strategy (Guest Post)

I’ve been getting quite a bit of questions from some people who have been following my writing for some time and they noticed the recent strategy changes in my equity portfolio and so they wrote to me to understand the thinking behind the idea.

For those who are relatively new to my blog, my equity investing strategy for the past few years entails investing in dividend paying companies in the Singapore market (and more recently HKG market) while hoping for some sort of small growth as part of the overall capital appreciation.

This post was originally posted here. The writer, Brian Halim is a veteran community member and blogger on InvestingNote, with a username known as @3Fs and has 2261 followers.

I termed this as the “X+Y” strategy in my past article here or the “6+4″% strategy if you had attended my past talk during the 2018 BIGS Investing Conference.

Until today, I remain a huge believer of investing in dividend paying companies because of several fundamental factors which I will not talked about it in this article.

Like most people, my strategy evolves over time – and I am constantly opening my mind in pursuit of a better strategy that would fit my investing temperament and style better.

There is the CFD, a platform which I have been actively using for the past 4-5 years and activate whenever there is a huge market downturn and constraint for funds.

In the past year since I have also entered the US market, I have also tried out options investing and this will be the main topic which I will today compare and contrast the difference with dividend investing as both of them threw out similar characteristics in the form of cashflow.

I’ve been thinking for a while on how I can structure my answers logically because the strategy fits so well with my own philosophy that it feels very natural to me when implementing, yet it can be foreign to others.

I’ll try my best and hopefully it makes sense.

In this article, I’ll break down the comparison between these few categories:

  • Cash Flow Frequency
  • Predictability
  • Passiveness
  • Volatility
  • Risk Management
  • Leverage
  • Total Return



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Demystifying The World Of Derivatives

Demystifying The World Of Derivatives

We all know that the financial world is full of uncertainties and risks. To survive in an unpredictable market, investors need certain financial instruments to mitigate the risks that they are facing.

To mitigate this risk, modern finance has come up with a method called hedging. Derivatives are widely used to hedge against risks and uncertainties, although not limited to just hedging.

Derivatives have been increasingly gaining significance in the financial market. The popularity of derivatives has grown manifold since the year of 2000.

Here is an infographic for a quick overview of the derivative market and the difference between market makers and direct market access (DMA):

derivativee

What is a derivative?

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