- 3DR's Covered Call Portfolio Clobbering the Stock Market
- Feb 28 2010
Since inception on August 13, 2009, the www.3DimensionalResearch.com model portfolio of covered calls has gained 14.8% in total value. By contrast, the Dow Jones Industrial Average is up 6.8% and the broader Standard & Poor’s 500 Index a relatively paltry 5.5%. The strong relative showing reflects a Portfolio that kept pace with the market through most of 2009’s second half and has held up well thus far in the 2010. Indeed, with respect to the latter, the 3DR portfolio has a year-to-date advance of 1.7%, while the Dow has lost 3.7% and the S&P 500 has fallen 4.2%. Astute stock picking accounts for much of the portfolio’s gains, and this has been augmented by substantial (option) premium and dividend income.
The “covered call” strategy is superior to simply holding stocks in all market environments except during strong bull markets. Few market observers, including ourselves, expect a roaring stock market in 2010, meaning that writing covered calls may be the ideal strategy for this year.