Lead-Lag Live

Maximize Your Income: Covered Call Strategies for Volatile Markets with Catherine Howse and Jeff Cullen


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In a world where traditional income sources fall short and market volatility threatens portfolio stability, finding the sweet spot between yield and growth becomes increasingly challenging. Enter Cullen Capital's Enhanced Equity Income Strategy (DIVP), a thoughtfully constructed approach that's been delivering consistent results for over 14 years.

Unlike many covered call strategies that sacrifice upside potential for current income, DIVP takes a more selective approach. By writing options on just 25-40% of portfolio holdings, the strategy maintains meaningful exposure to market upside while generating a target yield of 7% or higher. Half of this yield comes from dividends paid by high-quality value stocks, with the remainder from option premiums – creating a more tax-efficient income stream than strategies relying solely on options.

The portfolio consists of approximately 30-35 carefully selected large-cap value companies across all eleven market sectors, each chosen for their strong fundamentals, dividend growth potential, and attractive valuations. Trading at just 13x forward earnings, these companies offer both current income and growth potential that many pure fixed-income alternatives simply cannot match.

Perhaps most compelling is the strategy's historical ability to protect capital while delivering income. A hypothetical $1 million investment at inception with 5% annual withdrawals would have provided $856,000 in cumulative income while growing to $1.3 million over 14 years – demonstrating that income generation doesn't have to come at the expense of principal.

With recent market volatility highlighting the vulnerabilities of growth-heavy portfolios, DIVP's value-oriented approach has demonstrated resilience, outperforming many technology-focused covered call strategies. As investors reassess their income needs in an uncertain market environment, consider how this balanced approach to income generation might enhance your portfolio's yield while maintaining potential for long-term growth.

DISCLAIMER – PLEASE READ: This is a sponsored episode for which Lead-Lag Publishing, LLC has been paid a fee. Lead-Lag Publishing, LLC does not guarantee the accuracy or completeness of the information provided in the episode or make any representation as to its quality. All statements and expressions provided in this episode are the sole opinion of Cullen Capital and Lead-Lag Publishing, LLC expressly disclaims any responsibility for action taken in connection with the information provided in the discussion. The content in this program is for informational purposes only. You should not construe any informa

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Lead-Lag LiveBy Michael A. Gayed, CFA

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