In this episode, we explore why the income we earn isn’t the same as the return. We show how option income strategies work, what their historical returns have been, what drives the return, and what reasonable return expectations are.
We show why option income strategies have a positive expected return while sports betting has a negative expected return.
Finally, we look at other areas where we confuse income with the total return.
Show Notes
Variance Risk Premia by Peter Carr and Liuren Wu—NYU
Investments Mentioned
Brookmont Catastrophic Bond ETF (ILS)
Gateway Fund (GATEX)
Invesco S&P 500 BuyWrite ETF (PBP)
WisdomTree Equity Premium Income Fund (WTPI)
YieldMax TSLA Option Income Strategy ETF (TSLY)
Episode Sponsors
Money for the Rest of Us Retirement Investing Cohort
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Related Resources
557: Don’t Fall in the Dividend Trap
549: Why Catastrophe Bonds Are Yielding 12%, and Should You Invest?
544: Sports Betting Is Not Investing
Article: Tail Events and Tail Risk
Transcript
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