By Don Fanstone, Member, Kitchener/Waterloo User Group

Q&AVectorVest and the Markets:

We’re all subscribing to VectorVest and trading in the markets for the sole purpose of generating income and/or capital gains.

When using VectorVest, it’s likely that you’re buying shares or ETF’s to generate dividend income, as opposed to buying mutual funds and relying on someone else to make your stock picks. Interestingly enough, very few professional traders can consistently beat the market averages.

My broker frequently reminds me of this and wonders why I think I can do better than the professionals. If you follow the VectorVest System or a model portfolio such as Jake’s Patent Winners for example, you will do very well in picking winners, generating consistent dividend income, and keeping your trading costs to a minimum.

If you want to do a little bit better with respect to income received, you can sell Covered Call Options on the stocks in Jake’s Patent Winners. I will write about this in a future column.

For the purpose of generating Capital Gains, there is opportunity in trading Call or Put Options.

I will be writing a weekly column here in Stan’s blog about Options. If you have questions, please use the “Post” at the bottom of the blog to post your question. I will do my best to post an answer to every query.

Option trades since last Tuesday Feb. 10:

Sold 10 Avigilon (AVO) July 14 Calls @ $10.80 on Feb. 13. Bought @ $6.00 on Jan. 2/15. 80 % Profit.

Sold 5 CGI Group (GIB.A) Aug. 40 Calls @ $13.15 on Feb. 13. Bought @ $10.00 Jan. 26/15. 31.5% Profit.

Sold 10 Great West Life (GWO) July 28 Calls @ $7.82 on Feb. 13. Bought @ $4.15 on Jan. 29/15. 88% Profit.

All of these trades could have been held longer. Experience has taught me to follow VectorVest advice. Take profits in hand. While they were not exhibiting sell signals, the significant profit in $ said: “A Bird in the hand is worth two in the bush!”

Added 10 Brookfield Asset. Mgmt. (BAM.A) July 62 Calls @$7.15 Brookfield had a great earnings report.

Added 10 Kroeger (KR) July 65 Calls @ $9.20   (USA Holding). An excellent graph, running lower left to upper right. All signals positive.

KR Feb 18 2015

DISCLAIMER: Options trading involves risk and is not suitable for everyone. The information contained in this Blog is for education and information purposes only. Example trades should not be considered as recommendations. Options training is strongly recommended before placing any trades. VectorVest offers a basic options course online and occasional intermediate options workshops in Canada each year.