Benefits of Covered Call Writing Covered calls writing generates returns in three ways: The call writer collects the premium up front. The covered call writer earns any dividends paid on the call-covered stock. The call writer may realize the gain when the underlying stock price goes up. For example, AT&T…
Category: Investment Strategy
Build a Portfolio with Dividend-Paying Stocks and Covered Calls to Maximize Returns – Part 1
Dividend Stocks Stock dividends are a great way to increase earnings in a low interest rate environment. Combined with the covered call writing strategy, we can increase our returns on investment and minimize the downside risks at the same time. If you don’t need the income from dividends now, you can…
Investing in Bonds Can Be Very Profitable Too – Part 2
In Part 1, we discussed the benefits of the buy and hold strategy. Its long term goal to seek steady income and capital preservation. In part 2, we are going to look into the bond investment from an opposite perspective – Maximizing returns, capital growth and interest income. This situation…
Investing in Bonds Can Be Very Profitable Too – Part 1
Buying bonds or mutual bond funds has typically lower risks than investing in stocks. The length of time and risk tolerance help guide the strategy we can employ to achieve the financial goals. The investor who is close to retirement or is already retired may seek for steady income after…
Borrowing Money to Invest
We probably can agree on one thing – we won’t get filthy rich from our 9 to 5 day job. We need to use money to make more money. Can we get a loan with a 7% interest rate and use it to invest in the stock market? Of course,…