Don’t Let the Fed Pick Your Pocket

Warning: Controversial Opportunity For the last several months, we've been researching a unique event. A happening so big it's been called the "biggest financial opportunity of the last 20 years." And while you won't hear about this from the mainstream press, we've created a short presentation giving you all the details. Let me warn you now … this opportunity is controversial. But those who take the time to understand this massive event could set themselves up to make a fortune in the coming months … Click here for full details. Don't Let the Fed Pick Your Pocket By Evaldo Albuquerque, Editor of Retirement Strategist Dear Sovereign Investor, The Federal Reserve's chronic policy of near-zero interest rates is nothing short of an attack on savers. And those relying on income from CDs, savings accounts or money market accounts are getting killed.  In spite of all the taper talk, the Fed is unlikely to raise rates any time soon. If you are one of those who believe that rates will rise when Ben Bernanke leaves office in January, think again. The new Federal Reserve chief, Janet Yellen, has no intention of boosting rates. She will certainly not be a friend to savers.  During Yellen's confirmation hearings on Capitol Hill, she acknowledged that seniors are hurt by low interest rates that are a matter of policy. However, the incoming Fed chief believes the greater good — the health of the U.S. economy — takes precedence over savers.  Savers Will Still Get Slaughtered Yellen also believes the Fed needs to target a lower unemployment rate before rates can rise. During Yellen's confirmation hearing, Senator Mike Johanns asked Yellen if she were aware of the impact of the Fed's near-zero interest rate policy. Yellen admitted: "Savers are hurt by this policy." This means that if you're still relying on CDs and interest-bearing accounts to generate income, you'll be slaughtered. Here's the good news … While the White House has offered no definitive sign they will seize retirement accounts like IRAs and 401(k)s, their actions behind the scenes suggest otherwise… We've uncovered evidence that Vice President Biden has moved up to $90,000 of his money into a little-known account that's practically invisible to government auditors. Click here to continue reading... There's a simple strategy you can use to get the retirement income you need. In a minute, I will show you how you can use this strategy to generate a double-digit yield every year. But first, let me tell you about some recent developments that suggest the Fed will keep interest rates at rock bottom for longer than anyone thinks. Zero Rates Until 2016 The Federal Reserve's job is to keep inflation in check and to strive for full employment. Interest rates are the Fed's primary weapon. The new Federal Reserve chief is going to keep interest rates low, as long as unemployment is more than 6.5% and inflation is under 2.5%. Right now, unemployment is sitting at 7% and inflation is sitting at 1%, which is nowhere near the Fed's target. So there won't be any interest-rate hikes soon.  Outgoing Fed Chairman Bernanke has said that the Fed will keep rates low even after unemployment falls to 6.5%. Yellen also sees no reason to raise rates right away when the unemployment rate reaches 6.5%.  Moreover, Yellen sees the real unemployment rate near 10%, which is even further from the 6.5% target. In short, there is no way that savers will be able to generate income with CDs and savings accounts in this environment.  The Fed is currently projecting that the unemployment rate will reach 6.5% in 2014. That's why many analysts believe the Fed will start hiking rates in 2015. But recent comments from Bernanke and Yellen make me think those analysts are wrong. I believe we'll have zero interest rates until at least 2016. In other words, traditional sources of income will continue to pay nothing for a very long time. Collect $65 and Lock in a Gain of 24% About five weeks ago, I recommended you buy shares of the U.K.-based, New York-listed pharmaceutical giant AstraZeneca (NYSE: AZN), because of its low valuation and high dividend yield. If you followed my recommendation, you're up 11%. And that's before you even start to collect dividends. AZN hasn't announced its next dividend payout yet. But in the last two years, AZN paid $1.90 and $1.95 (per share) in March. Based on this historical pattern, I expect the company to pay a dividend of at least $1.90 (per share) in March. But you don't have to wait until then to start collecting income from your shares. If you sell a call option now, you can generate instant cash. Action to take: I recommend selling the AZN April 2014 $60 call option (AZN140419C00060000) for $0.65. Here's how this trade works: Since every options contract controls 100 shares, you need to own at least 100 shares of AZN to execute this trade. For example, if you're holding 100 shares, you can sell one call option. If you're holding 500 shares, you can sell five call options, and so on. If you sell one call option, you'll collect $65. If you sell five contracts, you'll collect $325. By selling this call option, you're agreeing to sell your shares for a price higher than what you paid. So you're essentially getting paid to lock in gains. If shares of AZN are trading above $60 by April, you will have to sell your shares for $60, regardless of the market price. Including capital gains, the dividend you'll collect in March (and the options premium you will pocket) will be a total gain of 24% in just six months. If shares of AZN are trading below $60, nothing will happen. You will pocket the options premium of $65 (for each contract you sell) and continue to hold shares and collect dividends. Plus, you'll be able to sell additional call options to generate even more income. The Fed will continue to sacrifice savers until at least 2016, but you can fight back —and boost your income — by selling options against the stocks you already own.   Regards, Evaldo Albuquerque Editor, Retirement Strategist P.S. With the Fed's plan to continue with zero interest rates for years to come, it's vital to have alternatives for retirement and savings accounts. Everbank's Euro CD provides such an opportunity. Click here for more information.  TODAY'S EDITOR Evaldo Albuquerque Evaldo's Retirement Strategist is a dynamic investment product aimed at adapting to ever-changing economic and market environments. It is the perfect product to help you profit from booms and protect you from busts. Click here for details. 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