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Today is the day! Sell stocks, invest bonds!
2022 Nov 11, 8:30am 12,498 views 83 comments
by Shaman follow (4)
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1
clambo
2022 Nov 11, 9:17am
YOLO baby.
I have to decide what to do with my upcoming RMD money.
I'm just patiently waiting (hoping) for WFC to get up to $54.
Maybe I will buy something high yield besides my Vanguard High Yield funds (stocks, corporate bonds, munis)
I am curious about the covered call funds which pay monthly.
I have to decide what to do with my upcoming RMD money.
I'm just patiently waiting (hoping) for WFC to get up to $54.
Maybe I will buy something high yield besides my Vanguard High Yield funds (stocks, corporate bonds, munis)
I am curious about the covered call funds which pay monthly.
2
Hircus
2022 Nov 11, 9:40am
Hircus
2022 Nov 11, 9:40am
clambo says
I was thinking about those recently. The good is if all they do is sell covered calls, it seems unlikely they could blow up on you. The price should be pretty stable unless demand for calls falls through the floor, destroying their ability to generate income.
But I can also think of a new risk. Selling covered calls basically makes constant bets about how much capital appreciation will occur in a given time period, and is willing to discard the excess returns above the expected level in exchange for income. If the underlying stocks experience a sudden burst in value, possibly due to inflation adjustments, this might sting. Seems to me a covered call fund is likely to get devalued by inflation quite a bit more than an equivalent fund which just holds the same stocks, IF the inflation price adjustments are sudden/unexpected/bursty. But maybe the fund managers can anticipate some of it.
I am curious about the covered call funds which pay monthly.
I was thinking about those recently. The good is if all they do is sell covered calls, it seems unlikely they could blow up on you. The price should be pretty stable unless demand for calls falls through the floor, destroying their ability to generate income.
But I can also think of a new risk. Selling covered calls basically makes constant bets about how much capital appreciation will occur in a given time period, and is willing to discard the excess returns above the expected level in exchange for income. If the underlying stocks experience a sudden burst in value, possibly due to inflation adjustments, this might sting. Seems to me a covered call fund is likely to get devalued by inflation quite a bit more than an equivalent fund which just holds the same stocks, IF the inflation price adjustments are sudden/unexpected/bursty. But maybe the fund managers can anticipate some of it.
3
Shaman
2022 Nov 11, 10:09am
Shaman
2022 Nov 11, 10:09am
FarmersWon says
A few months ago (August) the DOW had an extremely short term peak of 33900. I just sold at 400 less than that. I feel pretty good about my timing. If your crystal ball works better perhaps you can share?
Too late.
You took all the losses and will lose on gains too.
Should have done few months ago.
A few months ago (August) the DOW had an extremely short term peak of 33900. I just sold at 400 less than that. I feel pretty good about my timing. If your crystal ball works better perhaps you can share?
Comments 1 - 3 of 83 Next » Last » Search these comments
I reinvested my investments in bonds yesterday, and switched my kids’ 529 college savings plan investments to bonds today. So I’m putting my own money on this bet, and I’m going all in.
BEAR MARKET alert!