Excellent interview, Adriano. Your approach truly sets your channel apart from the rest. We value the direct conversations you have with authors and fund managers, offering unique insights into covered calls and investments overall. Income investing certainly has the potential to thrive during downturns due to income still being generated and opportunity to reinvest at lower share prices. Covered call income factory works for me.
Big fan of the Income Factory after reading it about a year ago. Mostly in bdcs, reits, mlps, but will start adding cef positions soon. Thanks for the video!
The problem with covered call boosted income is that when stocks have a 10% to 20% selloff (which isn't unusual), the value of the covered calls in the portfolio also go to zero since no one needs a call at a price much higher than the current market. This increases the downside volatility compared to debt income, whose downside is moderated because interest rates get slashed when there's a down market. You can look at historical graphs to verify for a particular investment.
@@kookiebush EIC & ECC are worth considering. They invest in Equity & B rated tranches of CLOs. Watch some youtube interviews with Tom Majewski, the PM who explains them and the risks involved very well.
Our income stocks will show massive decline in market price when the general market declines. This decline will far exceed the income we receive from the investments.
I would agree, however the general market decline may not come soon. As far as the money supply is growing, the market will grow. The money supply more likely will continue to grow until the USD loses world credibility. This more likely will not happen very soon. When the USD goes down, commodities may go up.
It is very unlikely this is the case unless you bought the wrong ETFs. Covered call ETFs reduce the risk, especially during market decline. It cannot be riskier than the underlying itself.
for example an etf of preferred shares BEPR fell $7.30 or 53% in 1 month during the covid crash and in that same time paid .07 distribution so it lost 103 times what it paid out in that month. I always have a few spy puts about 120 days out and with a low delta say 15 or less but in a market crash that delta will change fast ,,,,insurance
I am also an income investor and follow you. However, the underlying assumption is that the economy will continue and I think that under the new administration that will seriously disrupt the entire economy.
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Excellent interview, Adriano. Your approach truly sets your channel apart from the rest. We value the direct conversations you have with authors and fund managers, offering unique insights into covered calls and investments overall.
Income investing certainly has the potential to thrive during downturns due to income still being generated and opportunity to reinvest at lower share prices. Covered call income factory works for me.
the high yields are not guaranteed
I appreciate that!
Big fan of the Income Factory after reading it about a year ago. Mostly in bdcs, reits, mlps, but will start adding cef positions soon. Thanks for the video!
Thank you. Excellent interview.
The problem with covered call boosted income is that when stocks have a 10% to 20% selloff (which isn't unusual), the value of the covered calls in the portfolio also go to zero since no one needs a call at a price much higher than the current market. This increases the downside volatility compared to debt income, whose downside is moderated because interest rates get slashed when there's a down market. You can look at historical graphs to verify for a particular investment.
That’s not how covered calls work. Premiums are paid up front.
What are 3 of the best credit cef's or etf's?
@@kookiebush EIC & ECC are worth considering. They invest in Equity & B rated tranches of CLOs. Watch some youtube interviews with Tom Majewski, the PM who explains them and the risks involved very well.
I respect Steven's past investment ideas and bringing attention to those different types of investments, but I'm not sure he's opened to anything new.
Don’t ever get tied to one philosophy….
Our income stocks will show massive decline in market price when the general market declines. This decline will far exceed the income we receive from the investments.
I would agree, however the general market decline may not come soon. As far as the money supply is growing, the market will grow. The money supply more likely will continue to grow until the USD loses world credibility. This more likely will not happen very soon. When the USD goes down, commodities may go up.
It is very unlikely this is the case unless you bought the wrong ETFs. Covered call ETFs reduce the risk, especially during market decline. It cannot be riskier than the underlying itself.
learn how to trade
@@mmmyeahh You obviously do not understand the income factory methodology.
for example an etf of preferred shares BEPR fell $7.30 or 53% in 1 month during the covid crash and in that same time paid .07 distribution so it lost 103 times what it paid out in that month.
I always have a few spy puts about 120 days out and with a low delta say 15 or less
but in a market crash that delta will change fast ,,,,insurance
I am also an income investor and follow you. However, the underlying assumption is that the economy will continue and I think that under the new administration that will seriously disrupt the entire economy.