This post is just me thinking aloud.
I don’t need the money that investing/trading could provide, nor am I willing to do the work that full-time trading requires. But the equity casinoes are ever present in the news, and I’ve got the tools needed to trade them. So, why not?
Debt issued by our dear government is exempt from state taxes. Depending on whether one lives a state that imposes income taxes, and depending on one’s marginal rate, it’s likely that your effective rate for T-Bills might be 6% percent or better. So that becomes one’s ‘risk-free’ rate, not that any investment is ever truly “risk-free”. But 6% percent does etablish a useful baseline.
According to Schwab’s scanner, there are 157 ETFs that pay a monthly div and whose yield is greater than 6%. E.g., USOI’s reported yield tops 24%, and I owe a slug of it as well as a half dozen other such covered call ETFs. But here’s the kicker. As with any instrument bought for its div, the risk is that losses in price might overwhelm what might be gained from distributions. Thus, I refuse to buy stocks that pay a measly 2%, 3% etc. But I’m willing to hold investment structures whose div is likely to outweight capital losses.
I took the summer off from trading, for wanting to be outside rather than on a screen all day. But now that Fall is here and the rains have returned, I’m looking for an indoor project. So, why not trade a bit, especially now that things have gotten geopolitically interesting?
PS. This is the link to a talk I gave on “Oars nd Rowing”.