To: Machaon who wrote (179916 ) 10/2/2022 7:55:46 PM From: robert b furman 1 RecommendationRecommended By
Read Replies (1) | Respond to Hi Machaon, I'm 42% cash and have been reinvesting my dividends. So many variables out there, inflation,interest rates, war, elections. Each variable is a possible pivot point. I've worked hard to build a dividend portfolio with dividend Aristocrats stocks and some that still have great cash flow,have fallen out of the increases. If this market declines and the dividend stream remains or increases, a drop in price will accelerate my revenue income by reinvesting the dividends for growth into the future. Spending my cash will require a bigger washout than what has occurred so far. I try to sell puts at climax periods like now. I'll go out in time doing that so I capture max premium. I only go out in puts at the level of my current dividend stream allows. I use strike prices such that If assigned, I'm happy with the yield based on my net cost (strike price less put premium). It allows me to be agnostic on retaining the put premium upon option expiration or buying the stock via assignment. It's not fast money, but steady slow wealth growth. For me it takes the fear out of market swings down. In fact I view a stock assignment as a bit of luck, as it requires my selected expiration month to be accidentally at a time of a market corrective wave. The expiration month is selected based on the premium needed for me to be happy with the resulting dividend yield. It's what makes a market. We each have our understood level of risk. Lord knows I have learned that hard way that margin has caused me more fear than I ever expected it would in general market declines. I took me 40 years and several nice home run ositions to figure that one out. I do have the cash reserves to handle the collateralized commitment. Unless this is a bigger decline than December 2018 or March 2020, I'll be OK. A bigger decline,will be more than scary and a huge once in a generation opportunity to pick up some great US companies. Thanks for the shout out. If you get to where you're spending your cash, I'd value and appreciate your additional thoughts. Best of trades! Bob
