Beating risk free rate by 2%?

Hi

I know that for most people here such a low performance would be ridiculous.
However there are already a lot of threads discussing how to turn 10k in 1M in less than a year.

So, if you wanted to beat the risk free rate by a few percents, how would you do it?
The goal, of course, is to be as reliable as possible.

 

Buy BNS.TO on the TSX. CAD exposure, 3.7% dividend, little captial depreciation risk.

 

Seriously? A bank? Currency risk? Equity?

IMO, Ishares bond ETFs, you can choose whether you want to take IR risk or Credit risk. Low cost, liquid, hedgeable.

 

The risk free rate is the interest from short term government bonds ("T-Bills"). To beat it by a couple percent, buy a diversified portfolio of longer-term, slightly riskier bonds. You could mix in a small amount of "High Yield" (aka "Junk") bonds too. There are numerous ETFs that provide fairly broad diversification and plenty of choices for maturity and type.

 

1) You want to beat the "benchmark" by 2%, not the T-Bill rate. :eek:
1) You have to know when to "churn" the portfolio.

 

Stocks and corporate bonds bought at the right time

 

Are PBR and EWZ "sufficient"?

 

sell puts on consistent dividend stocks

 

Those stocks have "small" dividends and "big" drawdowns when the dividend is eventually reduced/suspended. :eek:

 

Asuming this question is about USD and not, say, Euro, the low-risk way would be to buy inflation-linked governement bonds (TIPS) or a fund that invests in them.

With FED printing money like crazy the inflation is sure to pick up soon. From September 10, 2008 to March 10 of this year, Bernanke has increased the nation’s monetary base from $850 billion to $2.1 trillion.That’s an insane increase of 2.5 times in just 18 months.