Hi Sandeep,
First rule of investing is "DON'T LOSE MONEY"
Second rule is "Follow the first"
I have not sold any shares and my portfolio is as long as ever with core positions I trade around by selling puts.
Over the last 5 years I've sold far out in time puts on dividend Aristocrats. A few strike prices such that if lucky, I catch expiration on a dip and buy some shares via assignment. Then I drop down in strike price and increase the number of contracts, which hopefully help me pay for them.
All of my long ago sold puts have either expired or I've bought them back to close them, for pennies.
Since a lot of Breezes price targets are being hit AND some have rolled over into B waves down. I'll keep my powder dry and be patient.
Da Cheif's CLX analysis has been the best timing device I've ever seen. Breeze's EW reads have been the best I've seen.
If/when I catch a down wave and Cheif's bottom spotter becomes active AND the bid /ask spreads get Wide, the premiums in puts can double and triple. That's when I want to sell the puts to scared investors, who are being coached by their brokers to buy insurance and buy puts.
That's when I want to sell puts, which if assigned will increase my dividend yield based on net cost of assignment (strike price minus put premium).
That usually ranges in the 7% dividend yield if I'm lucky enough to get them assigned to me. If they expire to 00.00 I get to keep the premium.
Lately with the Treasury market paying over 5%, and it is risk free, I've let all of my puts run out and have been buying risk free Treasurys at 5.3 to 5.60 yield. It is not big money, but it is risk free.
If and when we get a corrective wave, I'll be able to get cash on the next day, and be opportunistically buying stock or selling puts, hopefully to get them at below market prices. To do that you must have cash to collateralize the possibility of the put assigning shares.
I'm not real bearish to the point of selling my shares that pay dividends.
I'm just sitting up on that barren tree, looking for some road kill to pounce on.<smile>
We're over bought right now, but my CLX offsets show some cloudy weather out on the horizon.
I don't always have to be balls to the wall long.
Reducing risk and keeping your money at work risk free is just a decision like buying or selling is. I been running off my long ago sold puts since last March so I'm finally very liquid and hoping for a correction. This year's rate increases has allowed that posture to be productive for the first time in over decade.
There are many enjoying that now. Look at the funds parked in Money Market funds. I'm just one of them.
Stocks are so advanced ,I don't see my desired dividend yield available for me to risk buying an overpriced stock.
I'm NOT a day trader and almost always a buy and hold positional investor vs a speculator.
I'm long and not really bearish, but ready and willing to be opportunistic on a corrective wave.
Bob |
