Thread: carry trade vs dividends

what is easier to setup, say a basket of interest positive currency pairs? or pick out a few high yielding dividend stocks?

Originally Posted by ;

my logic to choose stocks over forex is over the long term like 10 years lets say there is an upward bias meanwhile, interest rates will be changing, carry trades will unwind and i could be burnt badly... meanwhile on the stock side at the end of the day at least i still own the shares.

the upward bias is only for dividends, stock price increases are not anymore guaranteed. Gains can evaporate within days if there is a collapse, which is becoming more and more likely these days and more and more frequent. Owning shares or owning money, what's the difference, with both vehicles I own something.

my logic to choose stocks over forex is over the long term like 10 years lets say there is an upward bias meanwhile, interest rates will be changing, carry trades will unwind and i could be burnt badly... meanwhile on the stock side at the end of the day at least i still own the shares.

Originally Posted by ;

so what's leverage got to do with that?

the higher the leverage, the less physical money I need to invest, pretty logical, no? With the rest of my money I can do something else. The opportunity cost is greater with stocks.

Originally Posted by ;

obviously you also need to get the direction right, but that's the same with stocks. I thought the topic here was interest rate vs. dividends.

so what's leverage got to do with that?

Originally Posted by ;

the only positive i can see is interest is paid daily, however it's probably harder to time. With stocks you could find some that pay monthly dividends, but in most cases its quarterly, easier to time as over the long term they trend up... I've been trying to trade forex (paper trade) for 6 months now unsuccesfully, nothing really works for me.

6 months is nothing.

Originally Posted by ;

i take it you never get trades wrong, so what's the flip side of high leverage?

obviously you also need to get the direction right, but that's the same with stocks. I thought the topic here was interest rate vs. dividends. But apparently you know the topic better, so please elaborate more instead of giving bitchy comments.

the only positive i can see is interest is paid daily, however it's probably harder to time. With stocks you could find some that pay monthly dividends, but in most cases its quarterly, easier to time as over the long term they trend up... I've been trying to trade forex (paper trade) for 6 months now unsuccesfully, nothing really works for me.

Originally Posted by ;

carry trade vs dividends what is easier to setup, say a basket of interest positive currency pairs? or pick out a few high yielding dividend stocks?

I think the answer is currency pairs:you have higher leverage in the currency market, thus can invest more money you get interest every day vs. dividends only once a year but I might be wrong here. Not doing much stock investing here.

Originally Posted by ;

I think the answer is currency pairs: [list=1][*]you have higher leverage in the currency market, thus can invest more money

i take it you never get trades wrong, so what's the flip side of high leverage?