Covered Call Writer


Buy And Hold


The most common investment strategy of all is called buy and hold. The investor simply buys some stock and then waits. If it goes up, he makes money. If it goes down, he loses money. Simple.

At the right is the profit and loss graph for a buy and hold strategy where the investor has purchased a $46 stock. At all prices above $46 he has a gain; and at all prices below $46 he has a loss.

It's not a bad strategy, and if you can pick companies that go up you will do well. But covered calls are more conservative because of the downside protection offered by the call premium received.