The Alternative Income Fund uses a proprietary methodology using broad based S&P500 and Dow Jones index options to generate guaranteed income. This strategy successfully overcomes limitations and drawbacks of traditional fixed income investing in bank CDs, US Treasuries, Muni/Corporate bonds and preferred stocks.
Summary of Benefits
Safety of Principal:
100% risk-free income with yield comparable to US Treasury.
No upper limits:
Bank CDs are insured only up-to $250,000 by FDIC
The investment is liquid unlike CD maturity terms. US Treasuries can suffer loss of value if liquidated before maturity
60% of the yield is treated as long term capital gains and 40% of the yield is treated as short term capital gains. CDs or treasury yields are treated as ordinary income for tax purposes
Redemption and laddering :
Optimal holding period for this investment is a month to a quarter. In a rising rate environment, investor can re-invest at the prevailing US treasury rate every month or every quarter. This achieves natural laddering effect. Other fixed income investments suffer a loss of value in a rising rate environment
To view the past performance of this strategy please go here.