In 2023, we made about $300 a month in dividend income that year.
In January 2024, we made about $300 a week swing trading.
For the last 2 years we invested more to increase our investment assets.
In 2023 we set a goal to invest in dividend stocks.
We invested in about 100 dividend stocks.
We made about $300 a month in dividend income that year.
Toward the end of the year, my husband suggested we do not hold on to these stocks long term. But rather, we should sell them when they reach around their 52 weeks high to lock in the gain. We rebuy them when they are close to their 52 weeks low. That was a strategy we both used in the past when we invested our allowances.
He is more of a short-term investor or a trader while I tend to hold stocks longer. I use position trading time frame back then.
The goal of dividend income investment is for us to be able earn enough in dividend income equal to our monthly expenses. So that overtime, we do not depend on our employer to provide for our family needs.
I decided that if we will trade, I should learn a trading strategy that will work us.
I did my research and slowly narrowed my trading strategy to swing trading.
While I did my searches, I sold some dividend stocks at the end of 2023 when they reached close to their 52 weeks high. This allowed us to free some of our investment funds that we could use to trade stocks.
The stocks that had unrealized losses, we didn’t sell them.
The unrealized loss at the end of 2023 was less that the realized gains from selling the profitable stocks.
The gains from these stocks we sold close to their 52 weeks high, is higher than the dividend income earned during the same year.
Investing is like having a source of income and you take from it to pack in investment assets so that slowly, it can increase in value.
Trading is active and you can make more money trading than investing as you work actively at it.
I decided to swing trade and started at the start of 2024.
What is swing trading?
Swing trading is trading on one side of a swing on the chart. You buy close to the support or bottom of the swing and sell close to the resistance or close to the peak of the swing. You trade on one side of the swing and lock the profit in each time.
What is Position Trading?
Position trading is about trading the trend. You buy at the beginning of a new trend and sell close to the end of that trend.
We purchased our dividend stock close to their 52 weeks low and sold many of them at the end of 2023 when they reached close to their 52 weeks high to free some funds to swing trade stocks.
The profit made from the position trading or by buying at 52 weeks low and selling at 52 weeks high, was higher than the dividend income earned during the year.
Swing Trading Return
The rate of return is about 0.5% a day in average.
It is recommended to set an earning goal per week. Then back into it to see how much to have in your account to trade consistently.
The profit realized for swing trading one month in 2024 was more than what we made in dividend income.
We set about $300 profit a week and was able to surpass it in January 2024. We used about $40,000 as capital to trade with after selling some dividend stocks.
Conclusion: Dividend Investing vs Swing Trading
You can make income by investing in dividend stocks. The capital invested will be high for the dividend income to be high as well. You need a long-time frame for your account to grow or for your dividend income to grow.
You can make money investing in dividend stock.
You can make money position trading.
You can make money swing trading.
From my point of view trying all three strategies, I could say you make more money swing trading. And you make money in a short period of time. But you spend more time analyzing stocks to purchase and you spend time bookkeeping your trades.
Swing trading makes you more money compared to position trading and dividend stock investing.
Position trading makes you more money that dividend stock investing.
You just must find the trading or investing strategy that best suit your personality and apply it.
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