The essence of my investing philosophy lies in identifying exceptional investments that not only pay dividends but also hold the potential for substantial options premiums. In this post, complemented by my YouTube video below, I share two such investments that have played a crucial role in my income-maximizing strategy.
Investment 1: William Sonoma (WSM) – A Well-Run Powerhouse
Leading the charge is William Sonoma (WSM), a company renowned for its exceptional management and debt-free status. With a commendable track record of increasing dividends, WSM, currently trading at $219.81, stands tall in terms of growth and profitability.
In the associated video, I delve into my successful history of selling Vertical Put Credit Spreads (VPCS) on WSM, emphasizing the profitability of this approach. While the current price may seem high, I exercise caution and refrain from new trades. My entry point consideration hovers around $180, signaling a potential opportunity for a new VPCS if WSM reaches this level.
Investment 2: XLE – Energy Excellence in an ETF
Shifting gears to the energy sector, the Energy Select Sector SPDR® Fund ETF (XLE) takes the stage. Comprising major energy companies, XLE offers a 3.44% dividend yield, with a remarkable 5-year dividend growth rate of nearly 8%. MorningStar’s consistent four-star rating across various yearly rankings further solidifies its standing.
Opting for XLE over individual energy stocks, I find the risk-reward balance more favorable. The ETF’s tendency to trade within a narrow range, coupled with robust options premium and volume, makes it a preferable option for my options-selling strategy.
Closing Thoughts: Balancing Caution and Opportunity
While I don’t own shares in either WSM or XLE, my extensive history of trading Vertical Put Credit Spreads has resulted in no assignments. This has preserved capital but comes with the realization that missing out on potential growth, especially in the case of WSM, serves as a valuable lesson.
Explore more insights in the video located at the bottom of this post.
In conclusion, I invite you to join me on this dynamic journey of income maximization through dividends and options. The market presents challenges and opportunities, and through sharing experiences, we can navigate them together.
Thank you for being part of my journey.
