Executive Summary
Investors often find themselves stuck between the rock of expensive equity markets and the hard place of needing to grow their assets at a consistent 6.5% per annum. History suggests that investing in equities with the hope that the growth implied by current valuations will materialize is reckless. Meanwhile, sitting on the sidelines impairs the long-term prospects for most investors because their annual spending commitments do not shrink in line with the diminished expected returns of the stock market. Therefore the utility of a source of equity-like returns that is insensitive to valuations should be obvious. The basic put selling strategy that we outline in this paper provides this type of return.
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