Bought and Held. What’s Next?

[Driver Dave]

After buying and holding...

what is the next investment thing to try?

 

[ammulder]

Drinking yourself insensible while your balance goes up, up, up...?

 

[adiggs]

After buying and holding...

what is the next investment thing to try?

The 'after' sort of implies that you've accomplished your investing goals (at least to me). So "after" accomplishing your investing goals, then it sounds like it's time to enjoy the fruits of your decision(s). No further investment thing to try.

It sort of also implies that your investment thesis has run its course, in which case its time to close that investment and go looking for the next one.


Or more whimsically - having done "buy and hold", then one investment thing to try next is "more buy and hold"

 

[Driver Dave]

The 'after' sort of implies that you've accomplished your investing goals (at least to me). So "after" accomplishing your investing goals, then it sounds like it's time to enjoy the fruits of your decision(s). No further investment thing to try.

It sort of also implies that your investment thesis has run its course, in which case its time to close that investment and go looking for the next one.


Or more whimsically - having done "buy and hold", then one investment thing to try next is "more buy and hold"

Yes was interested in what is the first thing to try investment wise after buying and holding.

And I surmised the best answer was going to be more buy and hold but was curious.

The info I do run into most is covered calls.

Is that the next level of investor strategies?

 

[WattsHappening]

Yes was interested in what is the first thing to try investment wise after buying and holding.

And I surmised the best answer was going to be more buy and hold but was curious.

The info I do run into most is covered calls.

Is that the next level of investor strategies?

You will get a lot of differing opinions on covered calls. Like all investments, it has its upsides and downsides, risks and rewards. Upside is income generation. Downsides are limited stock appreciation and not being able to sell the underlying stock (without taking on lots of risk). But there are situations where it makes a lot of sense. If you are ok with giving up potential upside for guaranteed income generation, it's a low risk way of doing it.

And if you are bullish, selling cash covered puts is another conservative way to play options.

 

[CHGolferJim]

You will get a lot of differing opinions on covered calls. Like all investments, it has its upsides and downsides, risks and rewards. Upside is income generation. Downsides are limited stock appreciation and not being able to sell the underlying stock (without taking on lots of risk). But there are situations where it makes a lot of sense. If you are ok with giving up potential upside for guaranteed income generation, it's a low risk way of doing it.

And if you are bullish, selling cash covered puts is another conservative way to play options.

Since August, I’ve been trying to play both sides of this by simple HODL on core shares (x), and selling covered calls of 1-2 weeks duration on trading shares (0.4x). Both are in Roth IRA, and the latter capital comes from the previous allocation to conversative equities and bonds — sold in March, see no reason to hold bonds/fixed income during the next few years as rates are flat or rising. I’ve made >50% return on the trading shares through capital gains and covered call premiums in <4 months which is about the same as the return on that capital if it had been 100% TSLA HODL. I think in times with a less consistent and pitched upswing, the strategy will be superior, and it lowers holding risk. Strike prices are targeted to balance premiums (which are ~1/4 of potential capital gains) with likelihood of striking each period — tends to have been +$20-$30 over market during 4Q20 which may need to be adjusted if post-inclusion 2021 is less volatile.

 

[adiggs]

Yes was interested in what is the first thing to try investment wise after buying and holding.

And I surmised the best answer was going to be more buy and hold but was curious.

The info I do run into most is covered calls.

Is that the next level of investor strategies?

Echoing @sroh comment, covered calls are frequently the initial entry into options trading. They aren't the only thing by a long shot. The more general focus on selling options is something we've been talking about in the "Applying options strategy The Wheel..." thread. Come and visit. There is also a Trading thread for more general options trading, and a Beginner options trading thread (the name I forget - but it'll be in the first page or 3 of threads in this forum).

Read page 1 of the Wheel thread at minimum - if nothing else, there is a link to some free options education with an emphasis on selling over buying options. It's only the beginning of the education you'll want to acquire, but I do consider it to be the minimum -- about 20-30 hours of videos.


And a caution - if you aren't clear on the upside and downside risks (both in the position, and in the underlying share movement), then you shouldn't be in the position. Every choice to do, and not to do, carries risk and rewards; costs and benefits. Everything has it, including an investment strategy of buy and hold.

With options, these are all magnified, as they represent a form of leverage to the underlying share price movements.

 

[TheTalkingMule]

Hold and sell in 2025? Sell covered calls and hold til 2031? Either of those will do, anything beyond that and you're just being greedy. As mentioned above, it's important for the economy that you blast off some of these profits on things/giving back/experiences.