Daily Dividend: Triple-Leverage ETFs Versus Dividends and S&P (SPY, FAZ, FAS, BAC, C, WFC, JPM)

If you were buying Bank of America Corporation (NYSE: BAC) ahead of the dividend announcement and even looking at this tiny ‘hardly worth noting dividend’ from Citigroup Inc. (NYSE: C), you already had to know that you were buying one or both of the less-healthy money center banks.  Wells Fargo & Co. (NYSE: WFC) and J.P. Morgan Chase & Co. (NYSE: JPM) are just far healthier. 

The broader S&P ETF via the SPDR S&P 500 (NYSE: SPY) has outperformed even the triple leverage ETFs from Direxion as you will see the chart below:

Sometimes there is news around dividends and sometimes there is just noise.  The dividend news was somewhat easy to anticipate as a disappointment for Bank of America because it was not going to as easily be able to get as high of a yield.  CEO Brian Moynihan talked up normalized earnings but really kicked the can further down the road.  There is still also an overhang due to the potential mortgage put-back fears that investors have.  Whether put-backs in securitizations come to the hundreds of millions or the billions is still unknown and that will keep the risk trade there in Bank of America.

JON C. OGG