Stock on Stock: Bank CD's BAD, Utility Stocks Good

Saturday, December 26, 2009

Bank CD's BAD, Utility Stocks Good

So you are tired of the 2% at the most you can get on a one year CD. How about investing the money in equal parts in A T & T, Verizon, Southern Company and Duke Energy, buy a six month "at the money" put option to insure your principle and enjoy a 6% yield. Of Course you will have to buy more puts in Six months but if the stock moves up those puts at the same strike price will be cheaper then. This way you can enjoy a nice yield (at least better than the CD rate) and potentially get some up side return on the principle. Sounds good to me

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