Building Wealth I know what it's like to sit and watch your stocks...
On occasion, you feel good as the market rises. At other times, it's moments of pure terror.
But most of the time, you could die from boredom. Your account posts a tiny 0.5% gain this month, a 0.2% loss the next, and you hope the difference adds up to something substantial over time.
And that's if you're lucky. If you checked your investment accounts in 2000 and forgot about them, you could have logged in again in 2006 and seen no change. The same could be said from 2007 to 2012.
We all work hard to earn income and set aside savings to build wealth. Watching it do nothing for five or six years is painful. You could have taken extra vacations or bought a new car. Instead, you socked money away like you were supposed to.
Why just let it sit there?
That's why we love to generate "income from nowhere" with options...
Even when the market goes nowhere, we can sell options to generate positive cash flows.
These options have an intrinsic value of essentially zero. But we can earn hundreds or thousands of dollars each time we make a trade... and we can do that multiple times a year on the same stocks.
In the end, you're still holding the stock and you can make money... even if the return on the stock itself is zero.
Most important, we don't take outsized risks. We don't need leverage. We don't need to find risky small caps or unproven companies.
In my Retirement Trader service, we've used this strategy on bona fide blue-chip companies like Eli Lilly (LLY), Microsoft (MSFT), Intel (INTC), Johnson & Johnson (JNJ), United Technologies (UTX), Wells Fargo (WFC), Oracle (ORCL), Cisco (CSCO), Apple (AAPL), Morgan Stanley (MS), and others.
We can even use wide-ranging index funds like the SPDR Sector Select funds and others to earn healthy returns from low-risk diversified baskets of stocks. We've done that more than two dozen times.
And we've shown how collecting these upfront cash payments can reduce your risk relative to owning stocks outright.
This strategy isn't theoretical... We put it to work every day in Retirement Trader.
Since 2010, we've sold covered calls on a total of 180 positions and we've booked positive profits on 171. That's a win rate of 95%. And again, lest you think the profits are small, our average annualized gain is 15.4%.
Over the same period, the S&P 500 has returned 12.8% (with dividends reinvested) within the wild throes of a historic bull market.
As we've seen, those kinds of low-risk returns are supposed to be impossible in finance. But we've proven the "experts" wrong.
Remember, this is a low-risk strategy, not a "no risk" strategy...
There will still be times when your positions are down (though less so than those of regular shareholders)... So sticking with high-quality stocks at good prices will determine your success.
It will also take a little bit of effort to become proficient with options. In general, I tell potential Retirement Trader subscribers the following:
- Don't subscribe if you can't handle some volatility in the stock market. Sometimes we'll see our positions move down. Even though they'll be down less than those of regular shareholders, they will still be down. A track record of 95% still has 5% losers.
- Don't subscribe if you can't commit at least $25,000 toward this strategy. Options traders need to work in lots of 100 shares, and we need to have multiple positions to make sure we're diversified. I know it's tough to make money when you don't have money. But there's nothing I can do to reduce the capital requirements for this strategy. And it's just a fraction of a percent of what you'd need to be qualified to invest in a hedge fund or other vehicles that use options – and I suspect their returns will lag our own.
- Don't subscribe if you're not willing to spend a few hours learning. I'd say you should be ready to make your first trade after about an hour of reading. By the time you make your third trade, you'll really understand how the whole system works.
If you meet the above terms, I encourage you to take advantage of this special offer we have right now for Retirement Trader.
You'll start receiving recommendations twice a month, and get immediate access to our issues, portfolio, and special reports. You'll also receive the Master Course, a six-part video series where I personally walk you through everything you need to know to get the most out of my Retirement Trader approach. Plus, we're now offering a 30-day, full-refund guarantee. Click here to get started with "income from nowhere" today...
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What We're Reading...
- Did you miss it? Here's our issue answering reader questions about options.
- Something different: Have you seen the tree of death? Hint: it's in Florida.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Retirement Millionaire Daily Research Team
July 5, 2017