Why do you believe you are any better at buying stocks than anyone else?
Actually, I don't. Stocks on average return 10%/year. My long term plan only requires me to get 8.5% long term average return per year. This means I can be significantly worse than the average stock investor and still hit my goal. The odds that I will get 8.5% average annual return on my stock portfolio is significantly greater than 50%. I would put it much closer to 75% to 90%... The odds that I will get 10% return is about 50%. As the expected return drops, the odds of doing better than that number increase.
You mention that a strategy that includes purchase of QQQ coupled with selling QQQ puts would return more than a simple purchase of QQQ. If we look at one of my many posts :-) today on the subject we find this table:
Buy Put: decrease volatility, decrease return
Sell Put: Increase volatility, increase return
As such, I would agree with your assertion that the strategy you outlined would perform as you indicated... with the negative side effect that the return would have a higher variation than simple purchase of QQQ. You could argue that with a ten year horizon the variability is already sufficiently low that increasing it with the put strategy still leaves it within acceptable limits. That of course is a personal decision based on your investment objectives.
If you can give me an investment plan that includes options that produces average annual returns greater than SPX, AND lower variation in annual returns I would be VERY interested in it. There are tons of options available for SPX and they are heavily traded so are fairly priced with minimal spread.
--Alan
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