Andre1969
Thinks s/he gets paid by the post
I recently sold off all my holdings in GGN (Gabelli Gold Fund or whatever they call it these days) to harvest a loss on my income taxes. I threw the proceeds in to AGNC, a REIT, as they're about to pay out a dividend. I already have some holdings in AGNC. I had planned on selling that off as well to harvest a loss this year, but then it came back up just enough that I figured it wasn't worth it.
But, it got me thinking. Right now, AGNC pays 65 cents per quarter, which comes out to around 13%. GGN pays 9 cents per month, which comes out to about 12.2%. However, if I was to hold onto AGNC just long enough to get the dividend, sell it and put it into GGN, but then swap back the next time AGNC's dividend comes around, for the year I'd end up at about 21.1% in dividends.
I would get all four of AGNC's dividend payouts for the year, plus eight of GGN's twelve payments.
Of course, there is risk associated with this strategy. For one thing, both funds have been trending downward in price, and cutting their dividends. And if I end up having to sell one too low and buy the other too high, that will throw things off. And then there's taxes associated with short term capital gains, and sales commissions. And it's going to make things more complicated come tax time.
Anyway, I have thought about trying this, just to see how it plays out. And I'd do it with a small enough amount of money that it wouldn't sink me if I lost it all. Anybody thoughts? Good idea to experiment with, or asking for trouble?
But, it got me thinking. Right now, AGNC pays 65 cents per quarter, which comes out to around 13%. GGN pays 9 cents per month, which comes out to about 12.2%. However, if I was to hold onto AGNC just long enough to get the dividend, sell it and put it into GGN, but then swap back the next time AGNC's dividend comes around, for the year I'd end up at about 21.1% in dividends.
I would get all four of AGNC's dividend payouts for the year, plus eight of GGN's twelve payments.
Of course, there is risk associated with this strategy. For one thing, both funds have been trending downward in price, and cutting their dividends. And if I end up having to sell one too low and buy the other too high, that will throw things off. And then there's taxes associated with short term capital gains, and sales commissions. And it's going to make things more complicated come tax time.
Anyway, I have thought about trying this, just to see how it plays out. And I'd do it with a small enough amount of money that it wouldn't sink me if I lost it all. Anybody thoughts? Good idea to experiment with, or asking for trouble?