Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Here’s Why The Left’s New Economic Policies Are Just Stupid - 19th Feb 19
Should We Declare Emergency for Gold? - 19th Feb 19
Why Stock Traders Must Stay Optimistically Cautious Going Forward - 19th Feb 19
The Corporate Debt Bubble Is Strikingly Similar to the Subprime Mortgage Bubble - 18th Feb 19
Stacking The Next QE On Top Of A $4 Trillion Fed Floor - 18th Feb 19
Get ready for the Stock Market Breakout Pattern Setup II - 18th Feb 19
It's Blue Skies For The Stock Market As Far As The Eye Can See - 18th Feb 19
Stock Market Correction is Due - 18th Feb 19
Iran's Death Spiral -- 40 Years And Counting - 17 Feb 19
Venezuela's Opposition Is Playing With Fire - 17 Feb 19
Fed Chairman Deceives; Precious Metals Mine Supply Threatened - 17 Feb 19
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

One of the Greatest Income-Producing Tools for Retirees

InvestorEducation / Options & Warrants Jul 31, 2015 - 12:42 PM GMT

By: DailyWealth

InvestorEducation

One of the Greatest Income-Producing Tools for Retirees

Dr. David Eifrig writes: It might sound crazy... but retirees can safely earn 12% to 20% income streams on their savings.

My Retirement Trader readers have been using one strategy to rake in thousands of dollars every month.

It's simple. And once you get familiar with how it works, you can use this strategy to safely and conservatively generate 12% or more in annual income on a retirement account.


Let me show you what I'm talking about...

Consumer-electronics giant Apple (AAPL) is one of my favorite stocks to trade. It's cheap, dominates its business, and it's increasingly returning cash to shareholders through dividends and buybacks.

Back in May, Apple's share price was attractive. People weren't excited by the Apple Watch and the rising share price had stalled for a few months. The stock traded at just 13 times earnings... an amazing price for a company with such growth.

So in Retirement Trader, we recommended a trade that could have turned out one of two ways: We were either going to make a quick 16.4% (on margin) in three months (65% annualized) or we were going to buy Apple stock at a 4.7% discount to the current market price. We were going to win either way.

And we did it by selling puts.

Before you say, "Oh, it's an options trade. That's too complicated and risky," hear me out. I guarantee it'll be worth your time.

When you sell a put, you're agreeing to buy a stock below the market price within a set time. You get paid for making that agreement. If the stock never drops below that price, you get to keep the cash. If the stock does drop below that price, the cash ensures you get a discount to that price. It's like getting paid to offer $250,000 for a house the buyer is asking $300,000 for.

Here's the real beauty of this strategy: You don't have to be exactly right about how or when a stock will move up in price. Many factors work in your favor. So even if the shares stagnate, you still profit.

You're only agreeing to buy the stock below today's market price, so you're safe as long as it doesn't completely tank. And you don't have to be right forever – just for two or three months (your obligation to buy expires with the option).

It is, of course, possible to lose money on the deal. Every investment carries risk, and no one can predict the future. But selling puts gives you huge odds in your favor. It generates income and hedges your risk by getting you much lower entry prices on any companies you end up buying... great companies like Intel, Coca-Cola, and Apple.

This kind of trade is much safer than simply buying stocks outright.

If you do it right, you won't actually buy many stocks – you'll simply collect premiums and earn about 12% to 30% a year on your capital. All you have to do is be prepared to buy if the time comes...

And if you do end up buying one or two stocks, that's fine, too. If you think like a long-term investor, your entry prices will be low, and you'll end up buying dividend-paying companies that treat their shareholders well.

In our case, that never happened. Apple's share price stayed well above $125 (the price at which we had agreed to buy Apple if its price fell) by the time our option expired in July. We collected the full 16.4% return in just three months. Meanwhile, investors who simply bought the stock only broke even.


If you've never sold puts before, ask your broker for help setting up your account for these sorts of trades. Spend time reading about the strategy and make sure you're completely familiar and comfortable with it before you get started.

The effort you invest will pay off many times over. If you're looking for a conservative, high-income, retirement-friendly trading strategy, you can't find a better tool than this.

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig

Editor's note: If you're new to selling put options, don't worry. Doc recently walked one retired farmer through a trade. And we filmed the entire transaction – from start to finish – so you can see exactly how Doc's strategy works... and why it has a 99% success rate since 2010. Learn how you can use Doc's put-selling strategy to collect thousands a month with some of the safest companies in the world right here.

http://www.dailywealth.com

The DailyWealth Investment Philosophy: In a nutshell, my investment philosophy is this: Buy things of extraordinary value at a time when nobody else wants them. Then sell when people are willing to pay any price. You see, at DailyWealth, we believe most investors take way too much risk. Our mission is to show you how to avoid risky investments, and how to avoid what the average investor is doing. I believe that you can make a lot of money – and do it safely – by simply doing the opposite of what is most popular.

Customer Service: 1-888-261-2693 – Copyright 2013 Stansberry & Associates Investment Research. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This e-letter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of Stansberry & Associates Investment Research, LLC. 1217 Saint Paul Street, Baltimore MD 21202

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Daily Wealth Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules