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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (3031)	12/21/2021 10:35:36 AM
From: robert b furman	Read Replies (1) \| Respond to of 10653

HI Sun, I've been trying to diversify in E&P companies, specifically PSX. I try to buy them below market pricing by selling puts. On November 30 I sold January PSX puts. Although yesterday's price of the underlying was lower than when I sold the puts, time decay has done it's job. If I can accomplish that for 2 to 3 months, I'll use that cash flow to just go and buy some shares, also via puts, but not go far out in time and bump up the strike price. I know it doesn't help reduce the cost basis, but using expired puts as cash flow, in addition to dividends, accelerates the accumulation of dividend paying stocks. In a major market sell off, dividend paying stocks historically fare better. It will be a big decision to hold them during a downtrend. As price declines and (hopefully) the dividend stays the same, greater stock accumulation will be achieved with reinvestment of dividends. That's easy to type and I suspect very hard to endure. That's the long term plan. That plan will be trimmed somewhat, based on how high this market goes. For sure my non-dividend paying stocks will be first to go. Parabolic markets and Euphoria will hopefully be clues to sell off into the distribution top. That's my plan, I can't prove, but I'm sticking to it. <smile> Bob