Stock Investing For Dummies, 6th Edition

Chapter 24

Ten Investments and Strategies That Go Great with Stocks

IN THIS CHAPTER

Boosting your stock positions with options

Augmenting stocks with cash and low-risk investments

Accompanying stocks with exchange-traded funds

Yes, I love stocks, and I think some type of stock exposure is good for virtually any portfolio. But you must remember that your total financial portfolio should have other investments and strategies that are not stocks at all. Why?

Diversification means you have other assets besides stocks so you’re not 100 percent tied to the whims and machinations of the stock market. All too often, too many investors have too much exposure to the stock market. That’s fine, of course, when the stock market is raging upward, but potential down moves are there too. Therefore, you should consider investments and strategies that complement your stock investing pursuits. Check out ten of my favorites in this chapter.

Covered Call Options

Writing a covered call option is a great strategy for generating income from a current stock position (or positions) in your portfolio. A call option is a vehicle that gives the call buyer the right (but not the obligation) to buy a particular ...