401k rollover - "final" portfolio building

[Otter]

(02-15-2019, 12:09 PM)DividendGarden Wrote:

(02-15-2019, 11:36 AM)fenders53 Wrote:

(02-15-2019, 10:07 AM)ChadR Wrote: The only suggestion I would make is to spread your purchases over a few years.  That way you're not buying something at a high price today.

Absolutely agree with Chad.  Patience is the only thing that makes this massive rollover project work.  

That seems to be a recurring theme in this thread, so thank you.

Just remember. There's always a bear market somewhere. 

[fenders53]

(02-15-2019, 12:09 PM)DividendGarden Wrote:

(02-15-2019, 11:36 AM)fenders53 Wrote:

(02-15-2019, 10:07 AM)ChadR Wrote: The only suggestion I would make is to spread your purchases over a few years.  That way you're not buying something at a high price today.

Absolutely agree with Chad.  Patience is the only thing that makes this massive rollover project work.  

That seems to be a recurring theme in this thread, so thank you.

Sounds so easy until you are sitting on your life's savings in 100% cash and some of your faves are running significantly higher.  Makes you feel like you really missed the bus.  I immediately started buying small purchases of S&P 500 index on every dip for a month or more so I wouldn't completely miss out.  I figured if that's a terrible long-term idea, then buying individual stocks I knew were overpriced now, would not likely turn out so pleasant either.  The market dipped hard in DEC but it's not like my individual blue chips did much better. Because I owned large positions in AAPL and HD they did somewhat worse overall actually.

[NilesMike]

(02-15-2019, 11:36 AM)fenders53 Wrote:

(02-15-2019, 10:07 AM)ChadR Wrote: The only suggestion I would make is to spread your purchases over a few years.  That way you're not buying something at a high price today.

Absolutely agree with Chad.  Patience is the only thing that makes this massive rollover project work.  I made some mistakes for sure but I also endured the biggest up and down market months in quite some time.  This situation is just crying out to sell cash covered puts.  Grab some instant income up front that far exceeds dividend payments, wait for the market to force you into some positions that you selected, at prices lower than today.  I've made thousands of dollars while trying to build my final core port.  The collateral collects 2%+ interest during those months you fail at getting back into stocks.  It doesn't get much more conservative for this situation.  If you don't like that idea, then I would buy a lot of 25% positions in your very favorite longterm stocks soon, knowing that you are very likely going to be sitting on some losses and averaging down to fix it over time.  Finish up the positions with extreme patience because it will take a long time short of a true economic recession.

The selling of puts with strike price that YOU choose is WAY underutilized by most investors.

The benefit is two fold. It makes you wait for your pre-determined price to show up and you get paid to wait.

[fenders53]

(02-15-2019, 12:51 PM)NilesMike Wrote:

(02-15-2019, 11:36 AM)fenders53 Wrote:

(02-15-2019, 10:07 AM)ChadR Wrote: The only suggestion I would make is to spread your purchases over a few years.  That way you're not buying something at a high price today.

Absolutely agree with Chad.  Patience is the only thing that makes this massive rollover project work.  I made some mistakes for sure but I also endured the biggest up and down market months in quite some time.  This situation is just crying out to sell cash covered puts.  Grab some instant income up front that far exceeds dividend payments, wait for the market to force you into some positions that you selected, at prices lower than today.  I've made thousands of dollars while trying to build my final core port.  The collateral collects 2%+ interest during those months you fail at getting back into stocks.  It doesn't get much more conservative for this situation.  If you don't like that idea, then I would buy a lot of 25% positions in your very favorite longterm stocks soon, knowing that you are very likely going to be sitting on some losses and averaging down to fix it over time.  Finish up the positions with extreme patience because it will take a long time short of a true economic recession.

The selling of puts with strike price that YOU choose is WAY underutilized by most investors.

The benefit is two fold. It makes you wait for your pre-determined price to show up and you get paid to wait.

I am sure they are tired of our cash covered put preaching lol, but when we get too conservative picking our desired entry price, the market still gives us some folding money up front for waiting....  I have no kidding tried over 20 times to buy shares in AEP,XEL,SO and D since fall.  I still have zero shares, but the thousands of dollars of premiums collected get me through the pain of missing out on the hundreds of dollars in dividends.  It is a very under utilized strategy.  I was on the fence until I heard Buffet selling it in a vid.

[DividendGarden]

(02-15-2019, 12:51 PM)NilesMike Wrote: The selling of puts with strike price that YOU choose is WAY underutilized by most investors.   The benefit is two fold. It makes you wait for your pre-determined price to show up and you get paid to wait.

I've never tried that, but I've always sold covered calls out of the money (free dividends!).  This is a great idea and I'll really read and think about it.

[fenders53]

(02-18-2019, 11:39 AM)DividendGarden Wrote:

(02-15-2019, 12:51 PM)NilesMike Wrote: The selling of puts with strike price that YOU choose is WAY underutilized by most investors.   The benefit is two fold. It makes you wait for your pre-determined price to show up and you get paid to wait.

I've never tried that, but I've always sold covered calls out of the money (free dividends!).  This is a great idea and I'll really read and think about it.

Best way to find out is dip your toe in the water with a few fairly inexpensive stocks.  We'd love to help.

[DividendGarden]

(02-18-2019, 07:40 PM)fenders53 Wrote: Best way to find out is dip your toe in the water with a few fairly inexpensive stocks.  We'd love to help.

Suggestion for a few stocks to start with?

[fenders53]

(02-19-2019, 10:12 AM)DividendGarden Wrote:

(02-18-2019, 07:40 PM)fenders53 Wrote: Best way to find out is dip your toe in the water with a few fairly inexpensive stocks.  We'd love to help.

Suggestion for a few stocks to start with?

I'd be very happy to. Let's start with a list of stocks YOU like.  I will give their options a look.  I am not the one that has to sleep when you potentially get forced to buy.  Stocks seemingly stuck in a trading range are perfect for this strategy.  Stocks you think might run up 25% overnight not so much. 
  
You have to be comfortable you will own the stock for years, and somewhere near today prices.  Otherwise you have violated my number one option selling rule.  Be conservative, let the market force you to buy something you are excited to buy anyway, but at a discount.  Then find a place for that option check and move on to the next stock to consider.

[DividendGarden]

(02-19-2019, 11:57 AM)fenders53 Wrote: I'd be very happy to. Let's start with a list of stocks YOU like.  I will give their options a look.  I am not the one that has to sleep when you potentially get forced to buy.  Stocks seemingly stuck in a trading range are perfect for this strategy.  Stocks you think might run up 25% overnight not so much. 
  
You have to be comfortable you will own the stock for years, and somewhere near today prices.  Otherwise you have violated my number one option selling rule.  Be conservative, let the market force you to buy something you are excited to buy anyway, but at a discount.  Then find a place for that option check and move on to the next stock to consider.

Long list, I know, but here's a list of companies I'd be happy to own longterm.  Obviously not equal-weight, but I will be buying these companies over the next year or so.

ABBV
AMNF
AXP
AZO
BDX
BEN
BF-B
BKSC
BMY
BP
BRK-B
CHD
COST
CVX
DEO
DFS
DIS
DJCO
GD
GSK
HON
HSY
HTBK
INTC
ITW
JNJ
KDP
KHC
KINS
KMB
KO
LMT
MA
MCD
MCO
MDLZ
MKC
MKL
MO
MRK
MSFT
MTB
NSRGY
O
OXY
PEP
PFE
PSA
PSX
QCOM
RBGLY
RDS-B
RSG
SBSI
SBUX
SO
T
UL
UNM
USB
UTX
V
VZ
WDFC
XOM
YORW

[fenders53]

I can't complain you didn't give me choices. I've sold options on about 15 of those. Now to wait for some to pullback a bit. You don't have to wait for a correction, but selling puts on overbought stocks is not a good strategy. For the near future look at the ones that are actually trading towards the lower part of their trading band. You do have some stocks listed that have pulled back. Target the ones that are down on bad news that doesn't concern you long-term.

KO stands out as one to practice with. I don't see a lot of downside from here. There are many on your list that will be good when they pull back just a few dollars. I have no predictions for the S&P 500 short term, but that list is long and full of very high quality stocks. You'll get your chance for some of them soon enough.

Maybe sell a KO put like a MAR Strike price 45, or an April Strike 44 or 45. Grab some instant income and then watch the option price move as the time erodes. You won't get rich but you'll learn how this works. If KO dips and you get exercised the first month you try it, you just locked in at a decent price and a 5 1/2% yield for the year with Div and option premium.

I have 46s sold now. About two weeks and six weeks expiration I think. Received a good premium and I'd like some shares soon if it doesn't bounce. Selling a put just below current share price brings in a decent premium, and a likelihood you'll be assigned if that is the goal.

I don't intend to own ABBV, but if you like it that is another one that is surely way off it's high and good for a put sale. An April 75 or 77.50 put looks pretty good. Nice premium and you get in at a 12+ month low. Personally I think ABBV is going lower the next time market dips but that is pure speculation. I'd trade that one out of the money (like $5 under market) and let it walk back to me as I sell new puts. Did I make that sound easy? Well sometimes it's not. I think you are in a similar situation as I am. Trying to re-invest big money that represents a lifetime of investing, and it's damned stressful i this overvalued market. I'd strongly prefer you practice small with something like KO because I won't feel bad if you end up $100 upside down next month for listening to me.. I'm a phone call away if you'd like to chat. Just PM me.

Dewayne

[DividendGarden]

(02-19-2019, 02:35 PM)fenders53 Wrote: I can't complain you didn't give me choices.    I've sold options on about 15 of those.   Now to wait for some to pullback a bit.  You don't have to wait for a correction, but selling puts on overbought stocks is not a good strategy.  For the near future look at the ones that are actually trading towards the lower part of their trading band.  You do have some stocks listed that have pulled back.  Target the ones that are down on bad news that doesn't concern you long-term.  

KO stands out as one to practice with.  I don't see a lot of downside from here.  There are many on your list that will be good when they pull back just a few dollars.  I have no predictions for the S&P 500 short term, but that list is long and full of very high quality stocks.  You'll get your chance for some of them soon enough.

Maybe sell a KO put like a MAR Strike price 45, or an April Strike 44 or 45.  Grab some instant income and then watch the option price move as the time erodes.   You won't get rich but you'll learn how this works.  If KO dips and you get exercised the first month you try it, you just locked in at a decent price and a 5 1/2% yield for the year with Div and option premium.

I have 46s sold now.  About two weeks and six weeks expiration I think.  Received a good premium and I'd like some shares soon if it doesn't bounce.  Selling a put just below current share price brings in a decent premium, and a likelihood you'll be assigned if that is the goal.  

I don't intend to own ABBV, but if you like it that is another one that is surely way off it's high and good for a put sale. An April 75 or 77.50 put looks pretty good.  Nice premium and you get in at a 12+ month low.  Personally I think ABBV is going lower the next time market dips but that is pure speculation.  I'd trade that one out of the money (like $5 under market)  and let it walk back to me as I sell new puts.  Did I make that sound easy?  Well sometimes it's not.  I think you are in a similar situation as I am.  Trying to re-invest big money that represents a lifetime of investing, and it's damned stressful i this overvalued market.  I'd strongly prefer you practice small with something like KO because I won't feel bad if you end up $100 upside down next month for listening to me..  I'm a phone call away if you'd like to chat.  Just PM me.

Dewayne

Got it.  I sell covered calls all the time, so I get the concepts in general.  I just have to reverse the logic.

[fenders53]

(02-20-2019, 09:43 AM)DividendGarden Wrote:

(02-19-2019, 02:35 PM)fenders53 Wrote: I can't complain you didn't give me choices.    I've sold options on about 15 of those.   Now to wait for some to pullback a bit.  You don't have to wait for a correction, but selling puts on overbought stocks is not a good strategy.  For the near future look at the ones that are actually trading towards the lower part of their trading band.  You do have some stocks listed that have pulled back.  Target the ones that are down on bad news that doesn't concern you long-term.  

KO stands out as one to practice with.  I don't see a lot of downside from here.  There are many on your list that will be good when they pull back just a few dollars.  I have no predictions for the S&P 500 short term, but that list is long and full of very high quality stocks.  You'll get your chance for some of them soon enough.

Maybe sell a KO put like a MAR Strike price 45, or an April Strike 44 or 45.  Grab some instant income and then watch the option price move as the time erodes.   You won't get rich but you'll learn how this works.  If KO dips and you get exercised the first month you try it, you just locked in at a decent price and a 5 1/2% yield for the year with Div and option premium.

I have 46s sold now.  About two weeks and six weeks expiration I think.  Received a good premium and I'd like some shares soon if it doesn't bounce.  Selling a put just below current share price brings in a decent premium, and a likelihood you'll be assigned if that is the goal.  

I don't intend to own ABBV, but if you like it that is another one that is surely way off it's high and good for a put sale. An April 75 or 77.50 put looks pretty good.  Nice premium and you get in at a 12+ month low.  Personally I think ABBV is going lower the next time market dips but that is pure speculation.  I'd trade that one out of the money (like $5 under market)  and let it walk back to me as I sell new puts.  Did I make that sound easy?  Well sometimes it's not.  I think you are in a similar situation as I am.  Trying to re-invest big money that represents a lifetime of investing, and it's damned stressful i this overvalued market.  I'd strongly prefer you practice small with something like KO because I won't feel bad if you end up $100 upside down next month for listening to me..  I'm a phone call away if you'd like to chat.  Just PM me.

Dewayne

Got it.  I sell covered calls all the time, so I get the concepts in general.  I just have to reverse the logic.

Yes, it is just the inverse.  I recommend you sell a few puts in somewhat range bound stocks the first months.  You'll be used to the option price movements in no time.  As long as you sell puts in stocks you just have to own long, you really can't lose IMO.  But selling a put on a volatile stock that just ran 25% this month can get you hurt and that is why I mentioned KO or something similar, that you fell has some downside protection.  As much as I hype selling puts you won't see me doing it much at the moment because it will likely end real bad. Oversold stocks are best, but sometimes hard to find. Selling a put on a very overbought stock will make you very sad. If you make it a habit you will surely get burned.

You can also DCA this method.  A stock is at 60 and you sell a put at a 58 strike.  Calamity strikes and the stock dips to 52 quick, so you are likely going to paying way over market price in a few weeks.  Sell another put at 50, or pick up some long shares while it is way down.  Either way you in effect averaged down.  You can also roll that first put forward by buying it back near expiration and selling the same strike a month or two out.  I've done exactly that on MO and XOM puts that turned against me real bad. A month or two later the problem often fixes itself completely or partially.  That trick isn't going to work if you sold a put on AAPL or NVDIA and then it drops 40% in a few months.  Sometimes you just eat it and take your shares, but it's no different than if you paid too much for 100 shares going long at the wrong time.

Market could run up another 10% in FEB. That's not a wager I will make because it would be historical.