GAINED FREE STOCK AND BOOSTED MONTHLY DIVIDEND INCOME 10% WITH NO ADDITIONAL CASH!

I've mentioned in earlier posts a strategy I like to use to create what I call "free stock", meaning a stock in which I have none of my own cash invested.  In order to deploy this strategy, you have to have positions in stocks with unrealized gains.  You sell enough shares to recoup your original investment and whatever remains is "free" since none of your money is invested.  This works great with dividend stocks since you can continue drawing dividends on the remaining stock.

My current use of this strategy was with UVE, which I hold in both my IRA and my taxable account.  I was sitting on a gain of nearly 200%, but the price had shown some weakness of late, so I decided to take out my cash and hold on to the remaining stock.  It occurred to me that I could sell one third of the stock and recoup my original cash investment, making the remaining shares free to me.  By taking the cash and re-deploying it in CLM I gained 12 additional dividend payments per year, giving me a total of 168, for an average of 14 dividends per month.  Taking into account reduced dividend income from UVE, the additional income from CLM boosted monthly cash flow by a little over 10%!

So it's pretty much a triple play:  I boosted dividends by 10%, increased the rate of compounding in my portfolio by adding 12 additional dividend payments and my investment in UVE is now free!