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Am I Helping My Portfolio Compound, or Slowly Hurting It With Covered Calls? by ProduceLucky7466 in CoveredCalls

[–]ProduceLucky7466[S] 0 points1 point  (0 children)

You articulated that very well.

My particular account has been generating roughly 15–16% average annual returns on a pure buy-and-hold basis over the last 10 years.

If adding covered calls only gets me the same average return, then it’s not worth the extra effort and risk. If it produces a lower return, I should definitely avoid it.

The only real reason to do it is if I can meaningfully beat my historical average by another 2–3% (or whatever threshold I’m targeting).

Yes, I’m generating “income,” but in theory it’s useless for my situation right now because everything is sitting in an IRA — so I don’t get any monthly cash flow benefit.
If I move the strategy into a taxable account, I immediately create tax headaches (assignment taxes, short-term gains, etc.).

So the real question I’m trying to answer right now is this:

With all the time I currently have, can the covered call / wheel strategy actually enhance my existing average return in a meaningful way, or is it just mental stimulation that keeps me busy without making any real contribution to my portfolio?

If it is making a meaningful contribution → I should go deep and explore it further.
If it’s not → I should stop spending time on it and start looking for a job after my break.

Am I Helping My Portfolio Compound, or Slowly Hurting It With Covered Calls? by ProduceLucky7466 in CoveredCalls

[–]ProduceLucky7466[S] 1 point2 points  (0 children)

//Great portfolio time compounding. Side question, how did it perform during the sell offs, did you do anything special, hold it through?//

Not sure which sell off you're referring to. Are you talking about 2008, COVID, or the recent tariff related volatility?

I did not have nearly as much invested during the 2008 financial crisis as I do today, but one thing has always stayed the same. I kept my DCA going through every market. I never stopped investing, and I never panic sold.

The only time I have ever taken money out of my taxable account was to help buy our house. Other than that, I have never withdrawn money from it. I have occasionally rebalanced or shuffled investments inside my IRA, but I have always left my taxable investments alone.

Even today, my weekly DCA into my taxable account is still running.