Captain Capitalism

Last month, I picked Frontier Oil Corporation (FTO). When I picked it, FTO was $27.75 per share. I also noted that the August $30 calls were going for $1.50. Close of business Friday, FTO was $31.13. If you bought FTO and sold the one month call, you'd have $31.50 per share, a return of $3.75. If you bought FTO and decided to sell it now, you'd get a return of $3.38. Bottom line - evil capitalists rape the earth for profit - drinks are on Ren.

This month I'm making a very boring pick that should be good for a long time. The Evergreen Income Advantage Fund (EAD) is a closed-end high yield bond fund. Currently $15.05 a share, EAD has fluctuated between $16 and $14 since the fund was created. Why might this appeal to you? Because every month the fund pays $0.12813 per share, regardless of share price. I treat it like a really high interest paying savings account and just roll the monthly dividends back into more shares. If each share pays $1.53756 in a year, this is a yearly return of 9.6% if the share price is $16 and 11% if it's $14. This is a fairly low return but it is also a low risk investment. Like I said, boring, but if you have a spouse, kids, and little money to work with, this might be a really good place to start investing.