To The Moon

**Strategic Approach to Minimizing Losses**

While many investors enter the stock market with the goal of making a profit, the reality of market fluctuations often leads to a shift in focus towards simply breaking even. This approach isn't about abandoning the pursuit of profits, but rather about adapting to market conditions and protecting capital, especially when faced with the unpredictability of market corrections or personal missteps. A strategic way to manage this is by using options and dividends to create a cushion against potential losses.$Manulife(MFC)$ $MFC 20240621 19.0 PUT$ 

**Covered Call Strategy for Steady Returns**

One effective method I've employed is buying stable dividend-paying stocks like Manulife Financial (MFC) and simultaneously selling covered calls. For example, I purchased MFC at $26.30 and sold a call option at a strike price of $26, earning a premium of $1.20 over a 4-5 month period. This strategy not only provides immediate income but also allows me to collect an additional dividend, typically around $0.30 per share, boosting my returns.

**Cushion Against Market Drops**

What makes this strategy particularly appealing is the built-in protection it offers. With a total return of about $1.50 per share from both the premium and dividend, I effectively create an 8-10% buffer against any potential drop in the stock's price. Even if the stock doesn't appreciate as expected, I'm still generating returns of around 6% every 4-5 months, which compounds to a respectable annual yield.

**Focus on Capital Preservation**

Ultimately, this approach allows me to play for break even at the current price while consistently generating income. By focusing on steady, predictable returns rather than chasing high-risk profits, I maintain a balanced and disciplined investment strategy that helps mitigate the inherent risks of the stock market.

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