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Naked put selling is equivalent to covered call writing in terms of where and how profits and losses are incurred. But it can be advantageous in terms of cost savings and potential reward. Talk to an investor who is involved in a covered call writing program about his doing some...

If you pay too much for a stock, your return on investment won’t be satisfactory. In the AAII world of Shadow Stocks—companies with some history of growth, little or no dividend yield and a small amount of the stock outstanding owned by institutions—you hope to profit mainly...

Experience is that marvelous thing that enables you to recognize a mistake … when you make it again. —Franklin P. Jones It is not that easy to talk about one’s mistakes. In the early days of Tocqueville Asset Management, I suggested that the senior partners jointly write...

The covered call provides extra income to a buy-and-hold strategy. In exchange for this income, there is a risk of lost opportunity. If the stock’s price rises well above the fixed strike price of the call, you have your 100 shares of stock called away below current market value....

There are three elements of successful portfolio management: buying, holding and selling. Yet many investors focus their energies almost exclusively on buying and fail to make a plan for selling. It is crucial to find the best stocks and buy at the right time, but to keep profits,...

When you go through a complete market cycle—from the start of a new bull to the bottom of the next bear—your real objective is to nail down as much of the profits you’ve built as possible. But most investors give back more of their profits than they should, and too many...

It may not be comforting, but individuals are rewarded over the long term for investing in stocks because stock prices can go up or down. Short-term market volatility and uncertainty creates a risk premium to entice investors to buy and hold stocks. It is important to note, however,...

Technical analysis is a bit of a misnomer since it is really not that technical. A better name for the use of charts to make investment decisions might be risk/reward analysis or even market psychology. Sure, there are some complex mathematical concepts involved with some of...

Value investors are always seeking undervalued stocks to add to their portfolios while pruning those that are overvalued. However, a stock’s price doesn’t always reflect a company’s true value. The dividend yield is a useful measure of value for selecting undervalued securities...

Momentum investors seek rapidly growing companies with prices to match. Their hope is that continued growth will attract additional investors who will continue to drive up the stock price. That investment philosophy, centered on earnings growth, underlies the approach used by...