So as I posted before - coming into a decent chunk of change (mid/high 6 figures) and got to start doing things outside of my comfort zone handling finances.
I mean my 401k for example - easy enough to manage - pick 8 different mutual funds - split money between them and 20% cash. This though is more than that.
Here’s the plan - critique/suggest changes as needed:
- 50% in SPY/QQQ - with plan of selling just out of the money covered calls 4x a week to generate cash on at least half of the position.
- 30% in mainly dividend stocks - energy, tobacco, some select utilities and drug companies - again probably half of this in XLE or energy and selling weekly covered calls just out of the money to generate some income - other half in things like
BTI/MO/AEP and collecting the dividends.
Income generated from these 2 goes 50% into cash account and 50% into my “speculative” investments- nothing extreme - just the part of the portfolio that buys individual blue chips and holds them long term.
- 20% cash - cash equivalents
Biggest downside I can see is I’m exposed to the market as a whole - if the broader stock market stumbles - so do I. I can see the market slumping 20% plus next year as a whole. Of course going heavy in dividend stocks and value helps balance some of that out - but learning from mistakes in the past - feel I should be exposed at least 50% to the broader market. Utilizing calls to generate a little income and protective puts to offset rapid decrease risk should help.
Just thinking I’m better DIY vs paying someone to manage for me.
I mean my 401k for example - easy enough to manage - pick 8 different mutual funds - split money between them and 20% cash. This though is more than that.
Here’s the plan - critique/suggest changes as needed:
- 50% in SPY/QQQ - with plan of selling just out of the money covered calls 4x a week to generate cash on at least half of the position.
- 30% in mainly dividend stocks - energy, tobacco, some select utilities and drug companies - again probably half of this in XLE or energy and selling weekly covered calls just out of the money to generate some income - other half in things like
BTI/MO/AEP and collecting the dividends.
Income generated from these 2 goes 50% into cash account and 50% into my “speculative” investments- nothing extreme - just the part of the portfolio that buys individual blue chips and holds them long term.
- 20% cash - cash equivalents
Biggest downside I can see is I’m exposed to the market as a whole - if the broader stock market stumbles - so do I. I can see the market slumping 20% plus next year as a whole. Of course going heavy in dividend stocks and value helps balance some of that out - but learning from mistakes in the past - feel I should be exposed at least 50% to the broader market. Utilizing calls to generate a little income and protective puts to offset rapid decrease risk should help.
Just thinking I’m better DIY vs paying someone to manage for me.
