Note from Michael Salvatore, Editor, TradeSmith Daily: Tracing the path of the past two years, stocks have produced a return of… zero. Factoring in inflation, the returns are even worse.
And while we're at the cusp of new sustained highs, they're no sure thing. Risks are ever-present and growing by the day.
I noted this in the essay below, one of my first for TradeSmith Daily back in October. Sharing it again with you today, I've updated a few of the facts and figures… but the point rings just as true today as it did then.
My advice for such a situation remains the same: get comfortable learning to trade the ups and downs of the market. And as it just so happens, one of the greatest short-term wealth-building strategies I've ever seen has just opened to new subscribers.
Read on to learn how Constant Cash Flow is a haven from market volatility, and why you should consider using this quick-hit options-selling strategy today…
A Cure for the "Buy and Hope" Blues
By Michael Salvatore, Editor, TradeSmith Daily
Allow me to offer some common-sense, but uncomfortable, investment advice.
You will never get rich following the crowd.
Deep down, you know this. Most people don't get rich. And most people invest the exact same way.
But it's hard to break from the crowd when:
Your investment advisor mindlessly sticks you in high-cost, underwhelming index funds, preaching "buy and hold" until the cows come home.
Icons like Warren Buffett claim to use the same approach (while quietly doing something very different).
And every needle-moving trend of the past several years — think A.I., crypto, pot stocks — either slips through your fingers or turns on you at the worst possible time.
And now, the crowd's "buy and hope" retirement plan is at a standstill. The S&P 500 — the basis of most retirement portfolios — is at about the same level today as it was in December 2021.
That's two years with zero returns.
And that doesn't even factor in decades-high inflation. With an average annual inflation rate of nearly 5% from 2022 through 2023, that puts your returns firmly in the red.
Everything costs more these days. Food is up nearly 3% from a year ago. Shelter costs are up more than 6.5% from last year. Even the Federal Reserve's key rate, which guides the cost of borrowing money itself, is up more than 25% over the past year.
Whether inflation runs fast or slow, it will slowly destroy your retirement if you sit idly by. Add on falling stocks, and you can bet on it.
That is, if you take all this sitting down…
You see, there are plenty of strategies out there to help you break free from the "buy and hope" crowd. Rather than leaving your wealth to the fate of the S&P 500, you can use these methods to quickly draw cash from the market — whether it moves up, down, or sideways.
Strategies like this are essential to staying ahead of inflation and keeping your dream retirement on track.
One such strategy, helmed by TradeSmith's income expert Mike Burnick, offers consistent cash payouts as often as every single day.
These payouts can help offset broad market declines, negate inflation, and give you buying power to add to quality stock positions — all at once. In exchange, it only takes a few extra minutes of work and some calculated risk.
What do I mean by "calculated risk"?
Of the 263 closed trades the Constant Cash Flow strategy has produced since March, more than 99.2% of them were winners.
That's not a typo. Only two of all trades we've closed since launch didn't go our way.
Safe to say, this is a must-have strategy for your investing toolkit.
Make Cash Every Day With ''Buffett's Dirty Secret''
Chances are, you'll read the next paragraph of this essay and click away.
But I hope you're open-minded enough to stick around.
That's because this incredible income strategy involves options. And unfortunately, most folks think "options" are either risky, complicated, or both.
But the truth is, options are just as effective of a moneymaking tool as stocks, bonds, real estate, or any other financial asset — so long as you know how to use them.
Options simply give you the right to buy or sell a stock, at a price you decide, on or before a certain expiration date. You can also trade them on the open market.
Think of them like an insurance policy. You can exercise options to sell stocks at higher prices if they fall, or buy them at lower prices before they soar.
But here's the thing about insurance…
99% of the time, you aren't using it. You're just paying the insurance company to cover you in case you need to. Then a year goes by, your policy expires, and you renew without a second thought.
I say this because using the Constant Cash Flow options income strategy is like being an insurance company with the world's best underwriters.
Instead of buying options to use as insurance, Constant Cash Flow takes the other side of the trade and sells put options (or "insurance policies") on stocks.
When you do this, cash instantly hits your account balance. In exchange, the options buyer gets the right to sell you stock at an agreed-upon price, should it fall to that price.
Then, all you have to do is to wait for the options contract you sold to expire worthless (as it happens 99% of the time in Constant Cash Flow) and the cash is yours forever.
In the rare case the contract buyer exercises the option (or "makes a claim with the insurance company"), you'll simply buy 100 shares of the underlying stock per contract and do whatever you like with them.
This technique is much more common than you'd think, even from risk-averse investors.
Warren Buffett, "buy and hold" zealot that he is, has sold put options to generate fat reams of cash for his entire career.
Back in 1993, Buffett sold 50,000 put option contracts on Coca-Cola Co. (KO) to generate $7.5 million in cash for his firm. And he used options throughout the 2008 financial crisis to generate cash while also giving him the opportunity to buy stocks on the cheap.
How's An Extra $10,000 Sound?
Think of the potential of using this strategy and grabbing cash day… after day… after day.
One day, you might sell an option on Charter Communications (CHTR) for $55, like the Constant Cash Flow strategy recommended on Nov. 27. Not bad for a minute's worth of work.
Other days, like when it recommended selling a put on Super Micro Computer Inc. (SMCI) on Nov. 23, the cash payout is closer to $145.
Taken together as of last week, the winning trades add up to an astounding $10,076.50 in income — at minimum — since our readers started trading the strategy on March 15.
What would you do with an extra 10 grand? Personally, I'd be shopping for some great stocks… or dollar-cost averaging into ones I already own and want more of.
Now, there are a couple things you'll need to get started with this strategy. It's not much, though — just some starting capital and a few minutes of time to get your account set up to sell options.
There's also a bit of a learning curve, but we've done a ton of work to help you climb it. The Constant Cash Flow advisory is chock full of masterclass videos, special reports, tutorials — everything you need to get up and running, quickly.
The system also shows the risk of every trade down to the percentage point, filtering for only those with high odds of success.
And every week, Mike Burnick will keep you in the loop on what he's seeing in the broad market, and how it will affect the Constant Cash Flow trade recommendations — plus how he recommends you handle each open trade — in his Mike's Money Line video updates.
For investors with a mature investment account looking to get ahead of this stalling market, there's almost nothing better out there.
According to Goldman Sachs, 300 million people are about to find themselves on the wrong side of a great flood of destruction. And you might be one of them. How can you best prepare for what's coming?
Since Constant Cash Flow began, it's booked about 3.5% average gains across 263 trades and a 99% win rate — representing an average minimum cash payout of $39 per trade.
That's through the whipsaw markets of 2023… and the volatility we're seeing thus far in '24.
Up, down, or sideways, Constant Cash Flow almost always provides an opportunity to quickly generate cash from the market.
This is exactly the kind of strategy you want in your corner when the market's choppy. In fact, it does even better when volatility is high because put-option premiums pay out even more.
Whether you decide to join Mike or not, it's important to know more about strategies like these. They're critically important in a world of high inflation and negative real stock market returns.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
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