The Barbell Strategy of Investment

In the book "The Black Swan" there is a long discussion of the traditional investment theory of "portfolio management"----in a time of crisis, traditional theories of "portfolio management" are not effective because...in a moment of raw panic, such as in 1987 or recently in 2007....everything goes down....and mutual funds provide NO hedge.... The only thing that works was shown pretty dramatically in the Wisconsin Pension Fund during the crisis of 2007-2013...even when participants that 50-50 split between fixed and variable, they took large reductions in pension income reduction.... The "Barbell theory" as described in "The Black Swan" proposes 90% in fixed or very conservative and 10% in very agressive speculation such as options and very high growth stocks. That is the theory...we will see....stay tuned.

Reduce Your Basis---Monetize the Math

For very conservative investors, reducing the basis by covered call writing can be a way to increase profits...So..whether it is by dollar cost averaging, or call writing...getting that basis lower increases the probability of profit.