A Genuine Investing Question Something occurred to me on my walk this morning. For the past three years, Iāve been trying to continually improve my financial literacy ā books, audiobooks, podcasts, research, all of it. There are well-known books about index investing, dividend investing, stock picking, active vs. passive investing, tax strategies and even the Smith Manoeuvre. But I realized this morning: Iāve never had a book recommended to me that makes the case for covered-call ETFs as a long-term investing strategy. There ARE books about options and how to write covered calls. And I found a newer book, Option-Premium ETFs: Risk Transfer and Return Profiles, that discusses these products. But Iām thinking more along the lines of Millionaire Teacher, The Wealthy Barber or The Little Book of Common Sense Investing. Something that lays out: Hereās why you would build a long-term portfolio using covered-call ETFs. Hereās the evidence. Here are the benefits, risks and trade-offs. Covered-call ETFs have become increasingly popular, yet after three years of trying to educate myself about investing, I canāt remember ever coming across that book. Maybe Iāve simply missed it. Has anyone read one they would recommend? Genuinely asking. If itās out there, Iād like to read it and increase my understanding of the strategy.
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30 Comments
Levi Ewald@smallbird.financial Ā· 17h
Thatās a great point, I made a post a number of months ago that had the same realization, except in regards to the fact that no credentialed professionals recommend CC ETFs. Even ones that sell no products, so they have any financial instrument at their fingertips, donāt recommend them. Unfortunately you only see them recommended by people who are very new to investing (havenāt looked at the numbers deeply enough), or people who are getting paid to promote them by fund companies. Itās a sad reality we live in.
David Wells@zdawn6818 Ā· 16h
Iāve never read it but Iāve heard the income factory is a good read. I think you could adapt the principles to cc ETFs. The Income Factory: An Investor's Guide to Consistent Lifetime Returns by Steven Bavaria
george Young@geo_van Ā· 11h
Based on some research, books that teach how to write covered calls (or how the ETFs work mechanically) and some newer practical guides focused on the ETFs themselves do exist. What is still largely missing is the clean, narrative, evidence-based personal-finance book that says: āHereās why a thoughtful long-term investor might deliberately build a meaningful portion of their portfolio around covered-call ETFs, hereās the historical evidence and data, and here are the clear benefits, risks, and trade-offs ā presented the way Bogle or Hallam would present indexing.ā
Kevin M@kmando Ā· 17h
Thatās a great thought. I havenāt seen anything yet, albeit theyāre fairly new to the market or DIY investors. Iām certain something should be available soon ā¦. Perhaps Adriano is working on something ā¦ā¦.. š
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