The Right Mindset for Covered Calls

To be a successful covered call writer, you must recognize from the outset what your objectives are and the mindset you need to achieve your objectives

Compound Interest
Our objective is to generate consistent monthly cash flow from our assets. We can then reinvest this cash flow each month to compound our investment capital and generate extraordinary long term returns. Compound interest is the way to accumulate wealth. Whether in business, real estate, financial markets or any orther financial pursuit, compounding your assets is the fastest way to make them grow. Don't take our word for it. Many years ago, Albert Einstein was asked what he thought was the human race's greatest invention. His reply was "compound interest." He also regarded compound interest as "the eighth wonder of the world."

There are two types of interest: simple and compound. Simple interest allows you to earn money only  on your principal. Compound interest allows you to earn money on your principal and interest. Compounding is what Compound Stock Earnings' covered call methods are all about. A four percent return per month with compound interest will grow a $10,000 investment to more than $1,100,000 in ten years.

Monthly Cash Flow Focus
This is the key concept when using our covered call techniques. It's not about buying stocks and hoping and praying they go up. We don't care whether they go up, down or sideways. We have techniques for generating cash flow in any direction. Our sole focus is monthly cash flow. Our clients see the benefit the first trade they make. They either already own a stock or they buy a stock and then sell a covered call. The 3 -6% return is paid to them by the option speculator at that moment, cash money into their account. This is money that's theirs to spend or invest. It's not a paper return, it's actual cash.

Never Sell a Stock for a Loss
The stock market is the only market in the world where investors have developed a mindset that it is acceptable to sell a generally appreciating asset for a loss. You do not run out and sell your house for a loss because, at some point in time, the market value happens to be down. We reiterate: The stock market is the only market where people voluntarily sell generally appreciating assets for a loss. This is a destructive financial mentality based on ignorance and fear, and it is perpetuated by the brokerage community to increase their own revenues. Brokers only make money when you buy or sell. Holding your assets goes against their interests. At Compound Stock Earnings, we never sell a stock for a loss, and neither should you.