Published Fri, 25 Jan 2019 14:24:04 -0500 on Seeking Alpha
The markets have been a roller coaster since the October correction and January dip to bear territory. Nobody can know what they will do tomorrow, or next month, or for all of 2019. We can expect, and should be prepared for, high volatility. Engineered Income Investing has developed strategies that work well in such markets.
Are you interested in getting 5% to 10% downside protection immediately upon entering a trade, while locking in solid double-digit annual yield rates, so long as the share price remains above your locked-in target price that automatically exits your position at the end of a short term you have specified so long as shares have not declined below that deep downside safety exit? If so, you should read further. If you are willing to trade away some of the blue sky upside potential in exchange for this downside protection and double digit yields, then you should read on. If these are not acceptable trade-offs for you, then the strategy I present will not be of interest.
E.I.I. generates superior yields while lowering market risk. Today, I give a real time market priced example using Netflix (NFLX).
Shares of Netflix were trading at a recent high around $354, and they fell sharply to about $320.00 upon the 1/17/19 earnings report and call. Today, (Thursday) they are rebounding strongly, up $5.64 (1.75%).
Fair Value for NFLX is appraised based on P/E ratio. This widely accepted standard financial valuation metric shows very good correlation... Read more