RiskReturnOptimizer

Johnson & Johnson: Strong Pipeline, Compelling Valuation

Good analysis. Agreed on the conclusion.

Another great factor to holding JNJ and XLV ( Health Care ETF) is the seasonal out-performance vs SPY during the May to October period.

S&P has empirical data to show that you don't need to "Sell in May and Go Away", but instead, move into more defensive sector like XLV, which tends to out-perform SPY by 3-5% average annual rate. Not bad considering the possibility of pull back in broader market.

Full disclosure -- I'm long XLV with covered calls with strike price around 5% out of money, September 09 expiration.

Tough Times for Dividend Investors

In the current market environment where uncertainty is still high, I have been using a dividend harvest strategy (through SDY) with an extra boast from selling covered call on SDY. When the market gets overbought (as measured by various OB/OS, Oscillators, etc), I buy some protection through ultra-short ETF (SDS).

Year to date, I'm up around 5% while S&P is down about 10%. Currently, I'm long SDY, sold May $36 Calls on the SDY, and covered by SDS position today (will re-enter when market gets overbought again). My only complaint is the wide bid-ask spread on the SDY options, but otherwise, happy to keep earning dividend & getting paid option premium while waiting for market to stabilize (VIX down and stay down).