There’s a group of stocks I refer to as “forever hold” stocks because I believe you can hold them for at least a generation. They are companies that deliver products or services that are fundamental to our very existence, or have so completely taken over a market that only a disaster would dislodge them.
As it would turn out, “forever hold” stocks also are great stocks to sell covered calls against.
You see, you definitely can buy these stocks and just sit on them forever, reinvest the dividends and you’ll do just fine. However, you also can sell covered calls against these stocks, because they rarely move more than 2% to 3% on their best days. Thus, if the stock gets called away, you can buy it back and sell another call.
It’s rare you’ll miss out on too much upside, and the premiums you’ll capture when they aren’t called away will likely make up for it (and more). Plus you can always just sell calls against half your position.