The key concept of the Option Income system is vastly different then most investing premises. Traditional investing seeks a positive capital gain, the old “buy low and sell high” or “buy and hold” and wait for your portfolio to hopefully increase in value. Whereas the Option Income system seeks to generate positive income every month! This system uses and treats cash and stock like hard assets, in fact we treat them very much like real estate rental property! We use cash or stock as the underlying asset (real estate) and rent out the use of your asset each month to generate income (rent).
You wouldn’t sell your rental house at the first inkling that the property dropped in value would you? No! Why? Because it generates positive monthly income! Well if your stock market investment is generating 2-3% income monthly (that’s 24-36% annually) you don’t have to sell your stock when the price is down. How does this compare to the traditional advice given by so called Wall Street pros or your stock broker? They would have you sell it! Dump the losers and let the winners run. The typical stock market philosophy is that it is okay to sell for a loss. Sure that’s easy for them to say, it’s your money and they still get their commission! Whether you are a short-term trader trying to time the market or a long term investor trying to gut out the 5 to 20 year wait for your portfolio to become profitable again after that last huge market down swing, knowing when to buy and when to sell for capital gains is a tough psychological game to win at and most don’t. It’s a fact that even 80% of the professional mutual fund managers do not beat the S&P 500 market average.
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