| Pandas Have A Diet That Is 99% Bamboo |
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Apparently, they can't see a reason to diversify.
But that doesn't mean you shouldn't.
Proper diversification is the key to long-term survival when investing. The goal is to have non-correlated investments across asset classes, industry sectors, geographies, and time horizons. |
Covered calls are a good strategy because they can help you lower risk and increase yield on your well-diversified portfolio. You can invest in stocks or ETFs that track real estate, commodities, interest rates, industry sectors, geographies, and more. And then collect time premium on the whole lot as time passes.
Diversification via ETFs is a good strategy for smaller accounts because you can buy an ETF that is itself diversified, and then write calls against it for income. Examples include IWM which represents the Russell 2000, or SPY which represents the S&P 500.
How much diversification should you have? There are two schools of thought on this: On the one hand if you are perfectly diversified your returns will likely be average; while on the other hand concentrated positions can work for or against you depending on your stock and asset picking skills.
More diversification is better than less for the average investor. While momentum investing can be fun, once that party reverses course you'll be lucky to see it coming and get out while you still have a profit. Remember the tortoise and the hare? If you think you just can't stand to have a boring portfolio, especially when everybody around you is talking about today's hot thing, just remember the tortoise. He's the guy with the low-volatility, fully diversified portfolio who avoids unpleasant surprises and eventually wins the race. |
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| How Accurate Is Your Stock Guru? |
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There are many stock picking services and gurus available for you to follow (and/or subscribe to). But how accurate are they? The good folks at CXO Advisory have been tracking their performance. Here are some of the more popular names and their buy/sell accuracy as reported by CXO:
| Guru | Accuracy |
|---|
| Bob Brinker | 51% |
| Jim Cramer | 47% |
| Louis Navellier | 58% |
| Bernie Schaeffer | 49% |
This data shows that just because a well-known investment guru recommends a stock or strategy, you still need to be careful (and, of course, diversify). There's no sure thing and even the "experts" are only right about half the time. That may be better than the average investor, but it's still far from a sure thing. You can view the complete list at CXO's site.
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| Blog Articles |
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Here's a summary of March's blog articles (click on any article to read it):
| Article | Summary |
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| Market Timing With Covered Calls | Sell-offs are a good time to buy back your call options... read more |
| Market Meltdown | Rather than panic during a meltdown, use options to your advantage... read more |
| Investment In Options | Schwab and TD Ameritrade make big bets on options trading... read more |
| Third Year Of A Bull Market | Normally a good year for stocks, but there are reasons for concern... read more |
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| TIVO And 3 Other Covered Calls For Apr 16 Expiration |
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With less than 3 weeks to go until the April options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity):
| Rank | Symbol | Strike |
|---|
| 1. | TIVO | 9 |
| 2. | JDSU | 20 |
| 3. | MSFT | 26 |
| 4. | FCX | 55 |
(Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.)
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| Top 8 Covered Call Watchlist Stocks and ETFs |
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Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity):
| Rank | Symbol |
|---|
| 1. | F |
| 2. | AAPL |
| 3. | MSFT |
| 4. | CSCO |
| 5. | GE |
| 6. | INTC |
| 7. | GOOG |
| 8. | SLW |
(Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!)
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| Want More Covered Call Goodness? |
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Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from:
| Term | Price |
|---|
| Monthly | $59.95 |
| Quarterly | $149.95 (17% discount) |
| Annual | $499.95 (31% discount) |
Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today!
Happy Trading,
The Born To Sell Team
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