The Fed Put Has Become The Fed Collar


  • The Federal Reserve Put is a well-known phenomenon where falling equity prices convert hawks into doves.
  • The recent language has been decisively hawkish despite falling stock prices.
  • We tell you why the Fed Put strike is now far lower and growth stocks will go through another round of repricing in 2022.
  • I do much more than just articles at Conservative Income Portfolio: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Federal Reserve Taper

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2021 was all about disregarding the warnings.

No profits? No problem.

20X sales? No problem.

No Sales? No problem.

After all, it was not hard to find at least one analyst that would forecast huge earnings a

Brazil Vs US

Brazil Vs US (Bloomberg)

iShares 7-10 year treasury bond ETF price & change
Data by YCharts

USGGBE05 index

5-Year Inflation Break- Evens (Bloomberg)

Real retail sales

Real Retail Sales ((FRED))

Are you looking for Real Yields which reduce portfolio volatility?

Conservative Income Portfolio targets the best value stocks with the highest margins of safety. The volatility of these investments is further lowered using the best priced options. Our Cash Secured Put and Covered Call Portfolios are designed to reduce volatility while generating 7-9% yields. We focus on being the house and take the opposite side of the gambler.

Learn more about our method & why it might be right for your portfolio.

This article was written by

Trapping Value profile picture
The best way to provide income in today's markets while reducing risks

Conservative Income Portfolio is designed for investors who want reliable income with the lowest volatility.

High Valuations have distorted the investing landscape and investors are poised for exceptionally low forward returns. Using cash secured puts and covered calls to harvest income off value income stocks is the best way forward. We "lock-in" high yields when volatility is high and capture multiple years of dividends in advance to reach the goal of producing 7-9% yields with the lowest volatility.

Preferred Stock Trader is Comanager of Conservative Income Portfolio and shares research and resources with author. He manages our fixed income side looking for opportunistic investments with 12% plus potential returns. 

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: We have a short position in the QQQ as a hedge against our long positions.

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