Apr 29, 2015
Advisors Option 30: Rise of the Robo Advisor
The Buzz: What is going on in the world of advisors?
- An overview of the OCC study (with Notre Dame and the University of Mississippi) on performance of options-based strategies versus long equity strategies on the nine stocks widely held in 401k plans.
- How Robo-Advisors will sink pretenders and propel true financial advisors.
- Investors must look beyond US assets - using options for international diversification.
- Russell becomes the latest to unveil digital tools for advisors.
- President Obama will order the Labor Department on Monday to begin developing new rules for financial managers who handle retirement accounts for working Americans.
- Transaction Tax?
- Elizabeth Warren: Tax the banks - questions SEC chair on broker reforms.
Office Hours: In which the group takes on listener comments and questions
- Question from Neal A, Detroit MI - Can I use options to establish bullish positions in an IRA. I am particularly interested in bullish equity option positions using risk reversals. But I am concerned about the short put leg of the trade. Can I take advantage of the benefits of this position in an IRA?
- Question from Averyman - The 2015 contribution limit for an IRA account is $5500. Are there techniques to increase or circumvent this limitation utilizing options or derivatives?
- Question from Charles D, Richmond VA - I typically invest in dividend-paying equities on behalf of my clients. I am interested in adding covered calls to the equation. I would like to know if you have any tips for me as I embark on this road. Are there any particular characteristics of dividend-paying equities that make them better-suited, or perhaps not well-suited, to writing covered calls? Most of my clients are investing through retirement accounts. I plan to write 10% out-of-the-money calls when possible. Are there also any strategies for increasing the returns for my clients with these strategies?
- Question from Tom B - Great show. It now has a regular spot on my iPad playlist. I recently intended an alternative investment conference where one of the instructor discussed the benefits of naked put writes. I am familiar with covered calls but I’ve been actively discouraged by my custodian against put writing because it was “too risky.” So I never investigated them significantly as an investment alternative. Some of the points raised at the conference drew my attention including the fact that put sellers typically generate more income than call sellers. Do you agree with that as well as the overall sentiment that more investors should be utilizing naked puts as an investment option? Also are these strategies available to retirement investors? Thanks for all your insight.