This past Wednesday, October 19, I shared a unique strategy for the first time on air and launched a new service to help readers capitalize during these turbulent market conditions.
It’s unlike anything you’ve likely heard before… But it allows you to collect instant income in seconds that’s contractually obligated.
And at the center of it is options.
Now, I know when people hear “options,” they tend to think of them as either too risky or too complicated. So it makes sense if you have questions about it before you dive in. But I assure you, for someone like me – whose main priority is safety and reliability when it comes to building wealth – nothing could be further from the truth.
If you’re concerned about preserving your purchasing power in the face of high inflation and recession fears, you owe it to yourself to learn more about this strategy and about my latest publication, Intelligent Options Advisor.
So today, I want to address some common questions people usually have when they’re first introduced to our unique take on options. And then I’ll take some time to answer questions we’ve gotten from Intelligent Income Daily readers.
These span from questions about how our risk management strategy works to the overall market and how inflation will impact your investments.
Moving forward, I hope to continue answering your most common questions in these letters. Please write to us here. My team and I read every piece of feedback. And while we can’t give individual investment advice, we will address your questions in general terms as best as we can.
So let’s dive in…
Question (Q): How risky are options compared to owning stocks?
Brad’s Answer: There’s a right and wrong way to use options, as with any other tool. It really depends on your goals.
Many institutional investors, for example, use options strictly to reduce risk. In our case, we make sure to limit our greater principal risk for actual rewards.
In fact, since launching the initial version of this service in early 2021, it’s generated over three times more income than owning their underlying common stocks. And that’s through market swings and overall fear increasing in the markets.
Plus, 80% of the time, we don’t even have to buy any stock. So that keeps us insulated from their volatility.
And thanks to the income we generate – which is immediate, regardless of what happens with the stock or anything else – we lower our cost basis in case we do end up buying stock.
Q: Does inflation help or hurt the service?
Brad: We don’t expect inflation will have any impact on the option premiums we collect, and those are the core of the service. If there is an impact at all, it should be a positive one.
U.S. stocks are historically among the best hedges against inflation for that reason. By selling puts, we are betting stock prices will be flat or rise over time. That’s one reason why higher inflation benefits our strategy.
The other is because higher inflation usually results in higher interest rates, which is exactly what we are seeing now. Higher rates cause option premiums to increase, too.
Q: What if a bad recession occurs?
Brad: Okay, so yes. That will affect the service in a couple ways – just not in the way you’re probably thinking.
First of all, the opportunity set we target will be much larger. And second, recessions usually overlap with increased volatility… which is the number one reason option premiums – the instant income we earn from them – rise.
Higher option premiums generally mean more money in your brokerage account.
Q: What level of options trading do we need?
Brad: Since we are only selling cash-secured puts and covered call options, most brokers only require the lowest level of options trading authority. That’s usually called Level 1. Check with your broker to be sure.
Q: How do we pick each trade?
Brad: We spend a lot of time and effort assessing companies before we recommend them. First, we look for SWAN stocks. We analyze hundreds of companies every year, judging them on their dividends, balance sheets, and management teams. We want to know how well they’ll hold up in good times and bad.
SWANs stand the test of time – over time. Their stock prices can still sell off in the moment, mind you. But they ultimately bounce back because their foundations are so solid.
Then we narrow down the list further to the ones we think are best-positioned for specific time frames, and then again to those with the best valuation.
After that, we carefully compare different strike prices, expiration dates, and return profiles… all to find the highest profit potential with the lowest risk setup.
Q: Where can I learn more about this strategy?
Brad’s Answer: For a limited time, you can still check out my strategy for free here. And even more exciting, there’s still time for you to get paid upfront if you choose to follow my instructions and become an Intelligent Options Advisor member.
And now to answer some recent subscriber questions in the daily mailbag…
I receive your Intelligent Income Daily emails. I am a believer in dividends and compounding interest. If I live another 15 years, does compounding have enough time to be effective as an investment strategy? – Mary B.
Thanks for your question, Mary. Remember that the single-most important effect of owning dividend stocks is to shift investors’ attention away from unpredictable stock prices.
Instead, income streams are the greatest source of reward and the benchmark of success. And high-yield stocks generate attractive current income. In fact, I would say dividend stocks’ value rest squarely on their dividend prospects.
So, yes, by reinvesting those payouts, 15 years can create a substantial amount of wealth.
Do you have any advisory services on the “blue-chip stocks” you mention… I’m familiar with your research on REIT’s. I’m interested in learning more about dividend growers. Thanks. – Nathaniel R.
Yes, we named our daily newsletter the Intelligent Income Daily for a reason. In it, we focus on a broad universe of dividend growth stocks, including:
Business development companies (BDCs)
Midstream/master limited partnerships (MLPs)
But they’re all selected based on sound fundamental analysis. We screen for quality first and value second.
I’ve been reading your articles about REITs but have not seen any reference as to them being suitable or not, for IRA accounts. This is just a general question, but might you want to go into why or why not one should or should not hold them in a retirement account? Thanks. – Linda F.
Yes! REITs are great for retirement accounts, especially tax-advantaged ones like 401(k)s and Roth IRAs. Both allow investors to defer tax obligations until retirement.
In fact, that combination (i.e., REITs’ pretax dividends and tax-advantaged retirement accounts) can allow investors to defer taxes for decades.
With that said, I’m not a tax expert. So I suggest you consult your CPA to make sure my opinion would work for your specific situation.
Don’t Miss Out
No more time for questions today, but please don’t forget that there is still a limited amount of time to for you to “cash-in” on my recession-proof options strategy.
You’ll be contractually guaranteed to get paid upfront. That means extra income is directly deposited into your account… Every extra dollar you can earn in this environment goes a long way. Check out the replay of Wednesday’s webinar here.
Happy SWAN (sleep well at night) investing,
Editor, Intelligent Income Daily
P.S. And that’s a wrap, ladies and gentlemen. I hope you found today’s insights helpful – they’re all thanks to the intelligent questions my readers pose to me every day.
After you check out the replay of my special briefing, feel free to write me any more questions you have here. I look forward to hearing from you.