Saturday, October 11, 2008

Make Money While Staying Invested

If you are a long term investor, do you know that you can make extra money by lending your shares to others while they cover short the market. SGdividends recommend our readers to lend your shares. Why? It's because you can earn a (nearly) risk free interest rate on lending your shares, instead of letting it sit idle in your CDP account. From our experience, having people borrow from us, the interest is roughly 2.5% - 4% per annum.

For long term investors, there is another good reason why you should lend. It is because it gives you first hand news on which stock is going to get shorted (As people borrow your shares) and you could wait at the sidelines to invest when the shares dip.
And guess what? From our Commodities man! Mr Jim Rogers! He has been cover shorting stocks too during this period, commodities, that it. The asset which he was so full of praise about early this year and last year! See the sentence: "..I bought them. I covered shorts yesterday..". Oh yes, Mr Rogers, you depressed prices and then bought them back. Lovely..

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