Mon., Oct. 18, 2021. How our fearless, intrepid investor made out last week and her plans for today

Let me repeat what we frequently state about investing using the Monday morning program. Historically, 1.) over the long term, 2.) properly selected US market index exchange-traded funds, 3.) held in tax-advantaged accounts, 4.) in an appropriate asset allocation, have been the investors best way for growing savings and are likely to remain so for many years. Further, this approach to investing is effortless.

Trying to improve on this performance by picking stocks, timing markets, trading derivatives, investing in complex schemes works frequently enough in the short run to keep investors doing more of the same.

This approach to investing is OK in a “fun” portfolio which should make up a small percentage of one’s investments. In the long run, don’t bet on it your core portfolio.

We all need to invest, but nobody needs a “fun” portfolio. Saving alone will not keep us in comfort in retirement. Because of inflation, saving is riskier than investing using the Monday morning program.

Members who do maintain a “fun” portfolio would be interested in connecting with the link which follows. Ask Alan 186 Using Delta and Implied Volatility to Assess a High-Risk Trade

And again, let me mention a gift idea. A friend, a 91-year-old retired, highly successful businessman, is buying memberships in the Monday Morning program for his eight grandchildren, all grown adults. Buying the right gift for some friends and relatives is often a challenge. This businessman has found an answer. At the present annual fee of $12.00, the price is right.

Now, let us review how our fearless, intrepid investor made out in her “fun” portfolio last week.

Just out-of-the-money, Novavax (NVAX) was trading at $170.00 (NVAX C 15OCT21 170.00) and paying a premium of about $4.75 per share. She could have earned an immediate premium income of $5,700. ($4.75 times 1,200)

Instead, she decided to go further out-of-the-money and sold 12 Novavax (NVAX) covered call contracts, strike price of $180.00, expiry date Friday, October 15, 2021. (NVAX C 15OCT21 180.00)

She received immediate premium income of $2.20 per share for a total of $2,640.00. ($2.20 times 1,200) plus, she could hope for $10.00 per share of growth if any, for an additional total of $12,000.00. (1,200 times $10.00) for a grand total of $14,640.00.

And the hoped-for growth?