Every investor needs to make decisions for what’s best for their needs at their current point in time. For me, I am rotating away from small caps (IWM) to bonds via TLT. This is largely a move to reduce risk as TLT is a 20 year bond ETF.
Don’t take anything you read here as financial advice and with any investment there are risks associated with any equity.
The image below contains some of my TLT trades using a covered call strategy which I wrote about in this post a few weeks ago. I am hoping for 18% to 26% returns this year with this particular ETF from a combination of a ~4% dividend, ~4%-8% appreciation, and ~10% options income. Of course, there are no guarantees, if inflation spikes TLT may drop in value significantly if the fed needs to raise rates to quell inflation.
If we head into a deep recession, the Fed may cut rates significantly which may cause TLT to spike in value.
The trades above are entered in February and I banked about $750 in income from the call options and am looking forward to collecting the dividend over the next month which should yield an additional ~$380 in dividends. I hope I don’t get assigned but if I do that will be additional capital appreciation income.
AI provided assistance in building this TLT call option ladder and it’s a big experiment as I’m relying on the new app AI created to drive this activity. I told AI what I wanted and it suggested specific deltas and rolls on specific time frames to have the outcome I desired.
We’ll know the outcome at the end of the year and AI recommended specific window periods to roll for the rest of the year and I will try to follow them when possible.
I plan on adding more TLT in the future up to $200k total and right now I’m about half way there but as always, I reserve the right to change my plans at any point which is why I caution anyone against copying this plan or activity and nothing here should be construed as financial advice.
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