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Larry Berman CFA, CMT, CTA Dividend 15 Split Corp. DFN-T HOLD Oct 02, 2023

Uses leverage. Pays lots of yield. Highly volatile. Can be risky depending on markets.

Larry Berman CFA, CMT, CTA

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$3.820

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DON'T BUY

He is not bullish on Canada and would not play dividends through this one.

DON'T BUY

Yield of the ETF is higher than the components of the underlying stocks. They split the stock into preferred and equity. They sell options out of the equity version. A lot of investors don't know that there is leveraging that can hurt the price, and a high yield comes with risk.

DON'T BUY

It is a strip corp. where they strip out the dividend. You will see price shocks on this one. It is highly leveraged. He does not like it. There is a lot of risk here.

DON'T BUY

It is a split share financial corp. It has a big distribution. There was volatility in three periods from 2011. You have to be mindful of the volatility. There is some leverage involved and downside risk in times of market volatility. He would avoid this at the moment.

DON'T BUY

You get a magnification of performance both on the upside and the downside. So much easier to just buy the individual holdings, collect the dividend, get the capital appreciation, and not pay a fee. Why buy this manufactured security when you can buy the real thing? Doesn't trade well, and you're locked in.

COMMENT

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WEAK BUY

These companies are hybrids created by the big brokerages and owned by banks like Woody Gundy. They enhance yield by splitting off the growth portion of a stock from the yield-paying portion. Usually, this works, but you're giving up growth opportunities. Fees are involved, though. He doesn't own these derivatives. Not a bad idea for a retail investor looking to increase income.

DON'T BUY

Simpler portfolio with better growth if you own the individual stocks, where you get both the dividend and capital appreciation. With this one, you're playing dividend vs. capital appreciation.

HOLD

High volatility shares.
Be prepared for large ups and downs.
Not as defensive as other names.

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