How investors can increase their income in a low interest rate environment


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“The need and desire to generate income has been around for some time and there is increasing pressure [on financial advisors]to generate that income, ”Gossack said. He recalled that even after the resumption of the financial crisis of 2008-2009, investors had to deal with an environment of low interest rates which affected the growth of their savings.

“[If] someone had built [a]nest egg and interest rates have been halved, they have two avenues. Either they move up the risk curve to generate more returns, or they [have]to find more nest egg. And it can be very difficult when you start to move into the late 40’s, 50’s and 60’s, ”he added.

To solve this problem, financial advisers have come up with high dividend stocks. “These are actions that [give]you have four or five, six percent return, ”Gossack explained. However, these stocks are subject to exponential growth which means investors cannot expect high price appreciation. In addition, price depreciation can sometimes exceed dividends. As a result, more covered call options were seen as a relatively low-risk and cash-generating strategy for long-term investments. With such options, however, investors routinely forego future returns in favor of current income. Gossack also noted that although systematic call writing strategies aim to improve dividend income, this paradigm is not very effective.

“We have seen time and time again that [this strategy]generally underperforms. With TGED, we try to marry the two, that is to say to give investors income [and]at the same time, bring them growth because I believe in this environment in the future, investors need growth with their income. “


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