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Is the Market Going Up From Here? [view article]
Its called dividend stocks! Buy and hold long term and all will be well ReplyIs the Market Going Up From Here? [view article]
where is the growth potential for this market?? for what fundamental reason should it go up except because we want it to. you can draw curves of past performance and try to extrapolate but there a growth inhibitors present today - and a lot of uncertainty. ReplyIs the Market Going Up From Here? [view article]
Edward; i think you are correct and it seems to me that the stock market has risen and fallen in general with war and the price of and availability of energy.I think the economy will be precarious until this energy thing is corrected,whether fossil, sun,wind ,nuclear ,buffalo or whatever comes to the forefront.
In an energy crunch i don't think even war would boost the economy . evidently the one now has made it worse.
Putting a finance and energy crisis together spells trouble , big trouble.
A coherent government policy on both would help tremendously. Reply
guson
Is the Market Going Up From Here? [view article]
On the contrary find some good beaten up stocks buy them and hold on for the long term. Especialy good dividend returners like General Electric (GE) which I don't own any of yet but may take a position soon. Although short sellers are making money now some of them may get burned when the big boys turn thier attention elsewhere and the curve goes up instead of down. After all at the end of the trading week it's still a crap shoot either way. Stuff happens the trick is not letting it happen to you. A recession and depression only differ in that it's a recession when your neighbor is out of work it becomes a depression when you are unemployed. ReplyIs the Market Going Up From Here? [view article]
[Comment removed and user banned for continued abuse of site privileges.-SA Editors] ReplyEditors
General Discussion on DPD
Is this a buy or a sell? ReplyIs the Stock Market Party Really Over? [view article]
Nice piece. As someone who is using the "Santa Claus Rally" to "go to safety", I both hope you are wrong, and think you are right. Keep us posted. ReplyIs the Stock Market Party Really Over? [view article]
Good read, well written and logical. Replyks.com
Is the Stock Market Party Really Over? [view article]
Kudos on the great article. Well cited arguments. I have recently written three related articles at smartguystocks.com:"Sucker's Rally?"
"The Bull’s But: Signs of a Market Downturn"
"Crying 'Excessive Bearishness' Near All-Time Highs is Excessive Bullishness"
Thanks again. SmartGuyDH Reply
An In Depth Look at the New Covered Call ETFs [view article]
I did not mention BWV in this article, but covered it in a follow-up article at:www.qvmgroup.com/inves... Reply
An In Depth Look at the New Covered Call ETFs [view article]
You did not mention the new ETN with a lower fee than other strategies(75bps):The iPathSM CBOE S&P 500 BuyWrite IndexSM Exchange Traded Note (ETN) is expected to begin trading on the American Stock Exchange (AMEX) on or around May 23rd under the symbol "BWV". It will be the first ETN to offer investors cost-effective, tax-efficient exposure to the CBOE S&P 500 BuyWrite IndexSM. The index tracks the total return of a hypothetical "buy-write", or "covered call", strategy on the S&P 500® Index.
A buy-write strategy can help reduce losses from downside market performance in an equity portfolio. And now it’s as easy to implement as placing a single trade.
The new ETN will offer:
Risk reduction: Reduced volatility compared with the S&P 500® Index.
Ease of use: Exchange traded, eliminating the need to manually execute and manage a portfolio of stocks and options positions.
Tax advantage: Will not make taxable distributions, enabling investors to control the timing of taxable events related to their investment in the new iPath ETN.
All iPath ETNs offer:
Transparency
Cost efficiency
Tax efficiency
Daily exchange liquidity
Get the BWV Term Sheet and preliminary pricing supplement. Reply
An In Depth Look at the New Covered Call ETFs [view article]
I wouldn't recommend worrying about the end of the term of this fund. It was launched in 2005 and will be around long after you have made any investment. If you in the fund 10 years from now, look into that question if you wish.I doubt that the fund will stop writing calls, because that process is why the fund exists. They would have to make changes that probably would require a shareholder vote. I can't imagine that possibility effecting the price-to-nav relationship.
Note that covered call funds exceed the performance of the underlying index in a sideways market and in a declinging market (although they do not limit the downside), but they cap the return on the upside.
If you have questions that are not answered by published documents, the best thing to do is to contact the sponsor. Typically, you can get the info you want "straight from the horses mouth".
S&P 500 Covered Call Fund Inc
800 Scudders Mill Road
Plainsboro, NJ 08536
P: +1 609.282.5904
Fund web address:
www.iqiafunds.com/fund...
INVESTMENT OBJECTIVE
The Fund's investment objective is to seek total returns through a covered call strategy that seeks to approximate the performance, less fees and expenses, of the CBOE S&P 500® BuyWrite
IndexSM (the "BXM Index").
INVESTMENT STRATEGY
The Fund will pursue its investment objective principally through a two-part strategy. First, the Fund will invest the proceeds in all of the common stocks included in the S&P
500® Index weighted in the same proportions as the S&P 500® Index and/or other investments that have economic characteristics similar to the securities that comprise that Index. Second, each calendar month during the term of the Fund, the Fund will write (sell) one-month call options on the S&P 500® Index ("Written Options"). Reply
An In Depth Look at the New Covered Call ETFs [view article]
Nice post (including revised blog & comments by Mr. Nusbaum). As a newbie, I am understanding better how this investment idea works.To me, seems like BEP is a good option if you're looking to roughly match SPY performance with less volatility, with the bonus of a 10% dividend, and don't mind the 100 basis points.
Is there a point a few years in the future when BEP will stop writing covered calls and it's dividend, and simply become an index fund and revert to its NAV? (I read some posts expressing this concern a few months ago) What happens then? Wouldn't that reversion make relvant how the fund trades relative to the NAV, especially for your entry point into the fund?
Thank you for sharing your opinion. Reply
Nusbaum
An In Depth Look at the New Covered Call ETFs [view article]
Mr. Shaw,Thank you for the update, I read it but was not able to leave a comment...not sure I have a login for your blog's platform.
For anyone new to this, BXM sells at the money calls. There is another CBOE index with ticker ^BXY that sells calls 2% out of the money.
Additionally these indices exist in other countries, like Australia and a couple of others. I am hopeful that BWV from Barclays works out in terms of tracking. BEP has had some wild swings with its discount/premium to NAV. It looks like it has a 14% premium now which I'll pass on.
Thank you again for your time. Reply
An In Depth Look at the New Covered Call ETFs [view article]
Roger,I reflected on your comments and decided to redraft my blog on this topic. Since my principle purpose was to review and discuss the covered call strategy, I realized from your comments that by mentioning several funds, but not all of the funds in the category (many of which are following multiple simultaneous strategies), I was diverting attention from my principle point. In that respect you were correct to say that I was off the mark.
Consequently, I have totally rewritten my blog article to focus exclusively on BEP and BWV, which describe themselves as strict adherents to the single strategy of S&P500 BuyWrite.
Your comment helped me focus on that point while leaving out essentially extraneous information about other funds which could be the subject of another article another time.
Thanks.
If you are interested, the revised blog article is at:
www.qvmgroup.com/inves...
Richard Reply