For investors focused on building long-term, compound returns, the strategy has shifted in recent years. Whilst buying a high-quality S&P 500 ETF still remains a Buffett-approved approach, several new options have recently become available for compound-focused investors.
Investors can now capture high-yield income through sophisticated option-overlay ETFs. These funds keep their usual index stock exposure but sell options (often call options) on that index to collect premium income, which is then paid out as frequent distributions. These distributions often far exceed traditional dividends, turning the volatility of the S&P 500 and the Nasdaq-100 into a somewhat predictable cash flow engine. By reinvesting these yields, an investor can accelerate their share count growth regardless of whether the broader market is moving sideways or upward.
