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"I like the down to Earth writing style of the newsletter. Each month’s edition starts with a recap of the past month’s results from the recommendations that were made. That way, I can continue to track the results of his recommendations and see how my investments would have performed. I am still a novice at covered call and hedged covered call investing, but I like this down to Earth honest approach unlike most of the overhyped newsletters" – Jim, Houston
"Thanks for the advice! I wish I had been doing this for the past decade. Maybe I would have actually made real returns during this lost decade" – Bob B., Clinton
"I appreciate the advice on the anti-volatility investments, but what I really like the most is the Options Action Rewind Newsletter that you issue in conjunction with the Newsletter each week. I like the show, and I don’t always follow the trades they recommend since it is so quick. This gives me the opportunity to review them at my pace" – Neal L., Marshal
"I liked the strategy lab comparison between the in-the-money and out-of-the-money call spreads in last month’s edition. It is nice to have a breakdown between strategies each month. It gives me a better understanding. Thanks! Keep up your great work" Jason K., Indianapolis
"This is some of the most no-brainer stuff I have ever encountered. I wish I knew the right way to do this years earlier! I wouldn’t have lost so much sleep worrying about my retirement accounts. You have given me the tools to take a lot of the risk out of equity investing." – Tim B., Chicago
Hi, my name is Tom Burkett. In 2008, I (along with all of us) witnessed the harshest selloff in the US equities market in most of our lifetimes. I saw the value of my personal accounts and those around me plummet in value. Many people have left the stock market altogether due to fear, and a lack of trust in the markets themselves. And who could blame them? This was the most painful period in equity investing in my lifetime so far. And I hope it will always remain the most painful period in my lifetime.
That last question remains the number 1 reason that investors have left the market and have fled risk assets for more safety. As of this writing, the 10 yr US Treasury provides an unspectacular yield of 1.9%. This flight to safety has created a risk/reward profile that is negative this instrument. In other words, the 10 yr US Treasury is overpriced. And your real return is very likely going to be negative for this 10 yr holding period. This "safe" investment is quite likely going to provide a negative real return. At the rate our fiat money is being printed, inflation will more than likely exceed 1.9% over the next 10 years. In a way, I hope it does! That doesn’t sound very safe to me! And many investors agree which is one reason why other "safe havens" have skyrocketed in value as well. Gold and Silver have shot through the roof! The spot price of Gold exceeds $1900 an ounce. And Silver was recently as high as $50 an ounce. Less than 10 years ago, I was buying silver for about $5 an ounce. I want to warn you that none of these "safe havens" are safe any longer. There is a lot of fluff in the market for these metals. Look what happened to silver when the margin requirement was increased. Within a few days of this increased margin requirement, silver fell off a cliff losing more than 20 percent of its value and falling to $40 an ounce. This signalled renewed interest in the metal thinking this pullback was only temporary. But, with the weakness in Europe, I predict another round of injury to anyone in these metals at least in the short term as the US dollar will probably spike in value relative to other currencies. Also, the margin requirement for gold was also recently increased. This will, at some point, injure the price of Gold as well. Any minor downward move in price is going to cause margin calls which will ampify the injury in this gold bubble.
And here lies the most relevant question! What should you do? You are scared about the impacts of short term wild swings in equity valuation because you either need your funds fairly soon, or are sickened by the roller coaster ride on Wall Street. And you understand the rate of returns that "safe havens" provide are extremely low and might very well provide negative real returns. It might be difficult to believe, but the only real "safe haven" is to own solid companies that produce long term value for shareholders. This is not rocket science. If you are still reading this, you are smart enough to intuitively know this simple fact. But, that doesn’t take away the anxiety in equity investing. Nor, does it remove the volatile nature of equities. Many experts in the field suggest that as we near retirement or are in retirement we should greatly reduce our exposure to equity markets. There are great reasons why this suggestion is made. The main reason is that equities are "risky". And the selloff in recent years is PROOF POSITIVE of this reality. Equities do not go straight up! And sometimes they seem to go STRAIGHT DOWN! The nearer we are to needing funds tied up in equities, the less time… Read more…
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