Instead of DCA or going all in lump sum, I'm taking the middle road of
- buying some shares now, and then * laddering in with cash secured puts.
Day 1- (Thursday, March 26) I invested $400,000 ($100,000 in each position) and sold 4 puts for $4499, all just out of the money, and all expiring April 17. $600,000 is sitting in an interest-bearing account earning 3.8%.
This is my plan/reasoning
- If the puts go ITM, I'll sell more at lower strike prices. * If the market keeps retreating, I'm setting myself up for higher profits later by reducing my cost basis. * If things stay flat, I'm still generating income. * If things take off, I have some shares for the FOMO and I'm still generating income. * Still have not decided if I'll take assignment on the puts or roll them out for more income.
The portfolio is already slightly down (~0.1%), so I’m leaning toward selling lower-strike puts early next week if prices hold here. I have a rough plan, but I'll be responding (and I hope not just reacting) as the market shifts.
If multiple puts stay ITM, accepting assignment would be the closest approach to DCA, but if I roll them, I can use the income to add shares without reducing my cash. Would you accept assignment or roll them? I'm open to suggestions.