Cuts in dividends? This ETF covered writes about 33% of the portfolio. The higher volatility in energy adds well to value -- buffering about 10% of the total loss. The dividends could be cut entirely by the companies. The premiums would likely maintained.
For the next year or two, energy will probably outperform. The reflation trade will buoy energy. Dips will be good occasions. Further than 5 years and the sector is less desirable. A pure play in large cap energy is probably a better way to go.
In his income portfolio. He's cautious on Canadian energy, as the politics are not agreeable to energy right now, but he still wants to participate. Biggest 20 energy companies in the world. Good way to play in a diversified way with one holding.
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