Covered Calls for Income, a Conservative Investment Strategy

Suitability

Covered calls writing by Kensington is appropriate for persons who invest all or part of their assets to produce income, for those who want more cash flow than available from traditional fixed investments. It also provides reasonable protection, in most market conditions from loss of principle. Covered calls could also protect against the possibility that inflation will decrease future purchasing power. Covered calls article click here

Objective:

First to produce cash flow net of expenses in the range of 6 - 10 % annually (for conservative individuals) or 8 - 12% annually (for less conservative individuals) and secondly, to reduce the risk of owning stocks. This program could be appropriate for you if you want more cash flow than available from traditional fixed investments such as bonds, preferred stocks, CDs, or annuities. It also can provide reasonable protection, in most market conditions from loss of principal.

Kensington's covered calls program helps protect against the possibility that inflation will decrease your future purchasing power. We suggest that clients not take 100% of all cash flow but instead reinvest a portion back into principal, thus causing their nest egg to grow.

Covered call example click here