When it comes to Financial Investment Strategy for the Stock Market majority of investors believe that there is only one safe strategy viz.

'Buy and Hold'. The cause behind most people believing that this is the safest financial investment strategy for the stock market is because that is exactly what their financial advisers have told them. Have you ever heard the phrase "The key to successful investing is Time In the Market NOT Timing the Market "I believe that this is a lazy approach to investing and is really just an excuse to hide the fact that some financial advisers have no idea what the market is doing. Wouldn't successful investors use multiple financial investment strategy for the stock market?

If the market is at a record high and there is a chance of a correction then surely there is something that you can do (other than selling your stocks) to protect some of your profits? The reason why financial advisers don't want you to know about any other investment strategies for the stock market (other than buy and hold) is because it isn't in their interest for you to know about them. Let's have a quick look one very simply investment strategies that can be used to great effect on any stock market.

Covered Calls in Financial Investment Strategies

This is one of the most effective, low risk financial investment strategy that can be used on the stock market. The basic idea to sell call options on a stock that you own. What? I hear you saying. In simple terms it means that you are renting out your shares for a monthly premium and in return you are giving somebody the option to buy your shares at a predetermined price that is higher than what you paid for them. Let's say you own 1000 XYZ shares that are worth $15.00 each. People will pay you a monthly premium to have the option to buy these XYZ shares at a predetermined price within a predetermined time frame. For instance someone might offer you $500 for the right to buy your shares at $16.00 within the next month. Why would they do this? Because if the shares happen rise up to $18.00 they will be able to buy 1000 XYZ shares at a $2.00 discount per share ($18-$16). The great thing about this strategy is that both parties can win e.g. If this was to happen you would be happy too because you would get to keep the $500 premium and you would also make $1.00 from every share that you sold because you bought them at $15.00 and sold them at $16.00. It is a great low risk low risk financial investment strategy for the stock market that everybody deserves to know about.

So there you have it a simple investment strategy for the stock market that can help increase your cash flow and also gives you downside protection. What more could you ask for in a stock market investment strategy? So next time you see your financial adviser ask them about covered calls and see what response you get. My bet is that chances are fair that they would even not be aware what financial investment strategy you're talking about because their university course didn't teach that subject.