The 500 point Dow drop over the past couple of days illustrates, to an extent, how you can never really time the market. Index funds got clobbered today. The second best alternative is to profit when the market goes up and when the market goes down. How is it possible to do this? There are many ways but the easiest and safest (in my opinion) is to buy exchange traded funds (ETFs) and sell in-the-money calls for the ETF you own 30 to 60 days out.

This “system” is called ETF Covered Calls and you can always read more about it here at http://www.etfcoveredcalls.com

Was it perfect timing or luck that I happen to be in all cash this week when the Dow dropped? I had a feeling the Dow would drop with all the bad news coming out every single day: Sub prime loan mess, $100/bb Oil, $700 oz Gold, Weak Dollar, War with Iran, Billions wasted in Iraq, Out of Control Inflation, etc.

If I had held securities during this drop, it would have been beneficial because my short positions would have expired worthless or I could have bought them back very cheaply. We all know that the Dow will eventually recover right? It may take a few days, weeks, months or years but it will eventually recover the only question is how long it will take to recover.

My investing strategy is to focus on making 1.5% to 4% every 30 to 45 day period and not worry about averaging 10% per year or some other annualized return. I didn’t lose a single penny this week since all my stock was sold automatically last Friday during Options Expiry; it’s a natural “release valve” that locks in my monthly profit by selling when things are good and expiring worthless when times are bad – either way, I profit.
With the market down this week, I’ll let the ETF-Cashinator pump out some ideas for investing in this volatile market. I hope you’ll check it out at http://www.etfcoveredcalls.com.