Be Happy With S&P 500 Level Returns
My advice to most people is to just invest in the S&P 500, over a 10 year period you will beat 85% of money managers. People always want more and more… I don’t think they are wrong to want more and more but over the long term it is incredibly hard to beat the S&P 500. If you just want S&P 500 level returns my firm can put you in the index and write covered calls on your ETF and earn our fee. We write them far enough out to where we believe we have a 70-80% likelihood of success. It is realistic that for example if we charged 75BPS we could earn our fee through writing covered calls. See below for an example of a covered call.
I had a manager tell me once, he said, “you have to make it look like you are doing something”. Now this manager was very smart and talented but the truth of it is if you just put your money in the S&P, over the long term you will do better than if you hired someone. A lot of the manager out there use JPM or big banks to manage money. They will either hire them as a separately managed account, meaning the firm will give them your money to manager or they will use the banks analysis/funds to trade your money with. A lot of the time they are not the ones coming up with the ideas or making the decisions, they outsource it to someone else and collect a fee for “managing” your money.
These firms, when they hire someone else could not necessarily be a bad thing… it depends on what you get for that fee. If you get financial planning, or excess returns, or stellar advice it could be worth it but from my experience it often is not. I had one manager tell me once, he said “I often don’t even know what I am going to do with the money, my only goal is to get the paperwork signed and the funds over here”… I think that is a terrible attitude to have. Someone is giving you their life savings, its a very personal thing… you should know what you are going to do after having the meetings and doing the client assessments. Every client I work with, I sit down with them and get to know them and after getting to know them and what they care about I make an IPS (Investment Policy Statement). This statement tells you exactly how your funds are going to be managed so there is no uncertainty or misunderstanding. I then have the client sign and acknowledge the form and investment strategy. I make it a point to be professional with every client or prospective client I work with. The firms I copied mine after were firms I worked at: Healy Wealth Management and The Investment Counsel Company of Nevada. Both had fantastic things I learned. I poured that knowledge into Belvedere.
This was taken directly off Investopedia. Google “writing covered calls” to learn more about this income producing strategy. It is very popular among money managers out there and can increase your returns and give you basically a free portfolio potentially.
