Latest / How Canadian Markets Work / Episode 65: Covered Calls and Protective Puts (The Price of Protection)

Transcript

Episode 65: Covered Calls and Protective Puts (The Price of Protection) · How Canadian Markets Work

0:00
You have almost certainly seen them. The glossy
0:03
marketing materials, the brochures, and those
0:06
online ads for financial products that promise,
0:09
well, essentially, the holy grail of investing.
0:12
Things like enhanced income or absolute downside
0:16
protection. It just sounds like the perfect scenario.
0:18
It really does. Just a way to sleep perfectly
0:20
soundly at night while your portfolio steadily
0:22
churns out cash for you. What if the exact mechanism
0:27
designed to keep your money safe or to boost
0:30
your yield is actually the very thing that's
0:33
slowly bleeding your wealth dry? Yeah, that is
0:36
a question that completely changes how you view
0:39
the market, really. once you understand the mechanics
0:41
beneath it. Whenever you buy a financial product
0:44
that promises to alter the normal inherent risks
0:46
of the stock market, you are entering into a
0:49
trade. You're engaging in a highly specific structural
0:52
reality. And the absolute rule of financial engineering
0:55
is this. If you are gaining something comforting,
0:58
like a safety net, you are giving something much
1:00
more valuable away in return. Exactly. And so
1:04
that is our mission for you today. We are taking
1:06
a massive stack of sources on market mechanics,
1:08
and we are going to look right past all those
1:10
shiny marketing labels. We really need to. Yeah.
1:13
We're going on a deep dive, breaking down the
1:15
two options strategies that everyday retail investors
1:18
are actually using out in the wild. So the covered
1:21
call and the protective put. Right. We wanted
1:23
to show you exactly what is being bought, what
1:25
is being sold, and why the protection you think
1:29
you're getting often behaves completely differently
1:31
when you actually need it the most. It really
1:34
does. And to really grasp the true price of that
1:37
protection, we need to start with the first strategy,
1:40
the covered call. Let's do it. Before we examine
1:42
how these are packaged into these multi -billion
1:44
dollar funds, we have to look at the bare mechanics.
1:47
At its core, A covered call means you already
1:50
own the underlying shares of a company and you
1:53
decide to sell a call option against those exact
1:56
shares. Right. So let's define what selling that
1:59
call option actually looks like in practice.
2:01
When you sell a call, you are selling another
2:04
investor the right, but crucially, not the obligation,
2:09
to buy your shares from you at a predetermined
2:11
price on or before a specific date in the future.
2:14
And that line in the sand, we call that the strike
2:16
price. Right, exactly. And because you are granting
2:20
someone else a really valuable right while taking
2:23
on a strict obligation yourself, well, that buyer
2:26
has to pay you upfront. Cash in hand. Exactly.
2:29
That upfront cash payment is the premium. And
2:32
the term covered, that's the linchpin of this
2:34
entire strategy. It simply means you actually
2:37
hold the shares you are promising to sell. If
2:40
you didn't own the underlying stock, you would
2:42
be selling what the market calls a naked call.
2:45
Which is terrifying if you really think about
2:47
it. Oh, completely. Because if you sell a naked
2:49
call and the stock price suddenly skyrockets
2:50
on like a massive news announcement, you would
2:53
be legally forced to go into the open market,
2:56
buy those shares at a runaway astronomical price
2:58
just to deliver them to the buyer at the lower
3:01
strike price. I mean, the potential loss there
3:03
is quite literally infinite. It's a nightmare
3:06
scenario. Right. But because you are covered,
3:09
because you already have the shares sitting quietly
3:12
in your account. If the buyer decides to exercise
3:15
their right, you just gently hand over your existing
3:18
shares. So the infinite risk of loss is completely
3:22
taken off the table. Yeah, that unlimited risk
3:25
is eliminated, which creates a ceiling on your
3:28
worst -case scenario. regarding the option itself.
3:32
But, you know, this brings us to the foundational
3:34
trade -off of the strategy. Right, here's the
3:35
catch. Exactly. By eliminating that unlimited
3:38
loss, you are introducing a massive permanent
3:41
opportunity cost. You get to keep the upfront
3:44
premium cash the moment you sell the contract,
3:47
and you keep it no matter what happens to the
3:49
market. But your maximum possible financial outcome
3:52
is now strictly capped. You can never, ever make
3:54
more than your strike price, plus the premium
3:57
you collected. So it is exactly like holding
3:59
a winning lottery ticket. But before the numbers
4:02
are drawn on television, you sell the rights
4:04
to the jackpot to your neighbor just to lock
4:06
in a guaranteed 20 bucks. That is a perfect way
4:08
to look at it. You know, you get to put the 20
4:10
bucks in your wallet immediately, which feels
4:12
great. But if your numbers actually hit, you
4:15
just have to stand there and watch your neighbor
4:17
walk away with the absolute fortune that was
4:19
sitting right in your hands a minute ago. Yeah,
4:21
that captures the psychological pain of the strategy
4:24
perfectly. Let's actually translate that into
4:26
a fluid market scenario so you can really feel
4:29
how this behaves when real money is on the line.
4:32
Let's do it. So imagine you decide to put $5
4:35
,000 into a company you strongly believe in.
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You buy 100 shares at $50 a share. Okay, so I
4:42
have my $5 ,000 investment, but I want to squeeze
4:45
a little extra juice out of it I look at the
4:48
options chain and I decide to sell one covered
4:51
call contract, which standardly covers my 100
4:55
shares. Right. And I set the strike price a bit
4:58
higher than the current price, let's say at $55.
5:01
For taking on this obligation, the market pays
5:03
me a $2 premium per share. So $2 times my 100
5:07
shares, I immediately get $200 in cash deposited
5:11
directly into my account. Exactly. So now you
5:14
have your shares and you have $200 of hard cash.
5:17
Now let's walk through the scenarios. Let's say
5:20
the broader market enters a sudden rough patch.
5:23
OK. Your stock drops from $50 down to $45. Uh
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-oh. Well, the person who bought your call option
5:30
is certainly not going to exercise their right
5:33
to buy your shares at $55 when they could just
5:36
buy them in the open market for $45. Right. That
5:38
would make zero sense for them. So the option
5:40
just expires completely worthless. Exactly. I
5:43
keep my shares, which have unfortunately dropped
5:45
in value to $4 ,500. But I still have that $200
5:50
in premium cash I collected on day one. So my
5:53
total portfolio value is $4 ,700. Meaning I am
5:59
$200 better off than if I had just stubbornly
6:01
held the shares and done nothing. The premium
6:04
essentially acted like a small shock absorber
6:06
on the way down. Yeah, it provides a very modest
6:09
cushion. Now, let's consider a different environment.
6:12
What if the stock just moves sideways? It stays
6:15
perfectly flat at $50 right through the expiration
6:18
date. Well, the buyer still has no reason to
6:21
exercise. The option expires worthless. Your
6:25
shares are still worth $5 ,000. You still have
6:28
the $200 premium, meaning your total value is
6:30
$5 ,200. Once again, you are $200 better off.
6:34
And if the stock rises to exactly $55, which
6:37
is my strike price, the buyer still doesn't pull
6:40
the trigger because there's no profit in buying
6:42
at 55 for me when the market is right at 55 anyway.
6:46
Exactly. So my shares have grown to $5 ,500.
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I have my $200 in cash giving me $5 ,700. This
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feels fantastic. You know, I captured the growth
6:56
and I kept the premium. Yeah. And that specific
6:58
moment, the stock pitting exactly at your strike
7:01
price is the absolute optimal outcome. for a
7:06
covered call. Right, it's the dream scenario.
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It is where the strategy looks like sheer genius.
7:12
But, you know, we have to look at the reality
7:14
of how equity markets actually generate long
7:17
-term wealth. Markets don't just inch up to your
7:20
strike price and politely stop. They go on tremendous
7:23
unexpected runs. Suppose the company announces
7:26
a breakthrough product and the stock rockets
7:29
to $65 a share. Oh, wow. OK, so this is where
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the structural reality bites down hard. Yes.
7:37
The investor who bought my call is absolutely
7:40
going to exercise their right because they can
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force me to sell my shares for $55 and they can
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immediately turn around and sell them on the
7:47
open market for $65. Exactly. I have no choice.
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My shares are called away. You are forced to
7:52
sell. You receive the $5 ,500 for the sale, plus
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you still have the $200 you collected up front.
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You walk away with $5 ,700. But if I had just
8:01
sat on my hands and held the shares, ignoring
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the options market entirely... My investment
8:06
would be worth $6 ,500. I am $800 poor because
8:10
I sold that call. And if the stock goes on a
8:13
true tear and hits $70, I am still capped at
8:16
$5 ,700, while a simple buy -in -hole strategy
8:18
would have netted me $7 ,000. Right. I am bleeding
8:21
out $1 ,300 of missed opportunity. You actively
8:26
traded away the entire upside of the market's
8:29
best days, all for the psychological comfort
8:31
of $200 upfront. You systematically amputated
8:35
your gains. And if the math shows us that you
8:38
were routinely cutting off your best possible
8:40
outcomes, it begs a massive question. Why is
8:44
this exact strategy the foundation of an aggressively
8:46
marketed, multi -billion dollar ETF industry
8:50
in Canada? Yeah, that is the perfect pivot to
8:53
really the illusion of income because these Canadian
8:56
covered call funds are practically unavoidable.
8:59
They're everywhere. You see them heavily pushed
9:01
to retail investors, especially folks nearing
9:03
retirement, and it's completely built around
9:05
the premise of enhanced income. They promise
9:07
massive monthly distributions, advertising yields
9:11
of 8, 10, or 12%, which are numbers vastly higher
9:15
than what the underlying blue chip companies
9:17
actually pay in normal dividends. Oh, the marketing
9:21
pitch is undeniably seductive. Yeah. It tells
9:23
you that you can generate huge extra income from
9:26
the safe, boring shares you already own. But
9:29
we really have to strip the marketing away and
9:31
look at the financial engine of the fund. Right.
9:33
You aren't generating new income out of thin
9:35
air. you are systematically selling off your
9:38
future upside, converting that future growth
9:41
into upfront cash and handing it back to yourself.
9:45
The industry leans heavily on the word income
9:47
because it is a deeply comforting, familiar term.
9:50
It is far easier to sell than telling an investor,
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hey, we are structurally liquidating your future
9:55
growth potential to pay you today. You know,
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I have to push back here a little on behalf of
9:59
the listener, because human psychology plays
10:02
a huge role in this. Oh, absolutely. It is so
10:04
easy to look at an account statement and feel
10:06
successful. If my overall account balance is
10:09
holding somewhat steady and a massive cash distribution
10:13
is hitting my checking account every single month,
10:15
like clockwork to pay my bills, isn't that cash
10:18
in hand infinitely better than just hoping for
10:20
a paper gain that might vanish in a market crash?
10:23
It's a fair question. Right. Isn't a bird in
10:25
the hand worth more? It is the most natural human
10:28
response in the world to prefer a tangible cash
10:30
today over theoretical growth tomorrow. But you
10:34
must evaluate your investments using the correct
10:37
metrics. And yield is the wrong metric here.
10:40
Interesting. OK. You cannot look at a distribution
10:42
yield in isolation. Yield only tells you the
10:45
cash being handed back to you at this exact moment.
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What you really need to track is total return
10:50
over a full market cycle. Total return. Right.
10:52
Right. Total return includes the distributions,
10:55
plus or minus the actual changing value of the
10:57
underlying assets. If a covered call fund is
11:00
boasting an 8 % yield, but its total return over
11:03
five years is only 4%, it means the underlying
11:06
base of your investment is eroding. You are slowly
11:10
bleeding out your own capital. Yeah. And this
11:12
perfectly highlights the structural lag built
11:15
into these funds. In a flat or falling market,
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they look brilliant because the premium cash
11:20
cushions the fall. But they structurally, mathematically
11:24
underperform in strong rising bull markets. Exactly.
11:27
And the critical flaw for the long term investor
11:29
is that strong rising markets are the entire
11:32
point of taking equity risk in the first place.
11:34
Over the decades, the stock market drifts upward,
11:37
heavily punctuated by explosive bull runs. If
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you cap those bulls, bull runs by selling covered
11:42
calls, you completely destroy the mathematical
11:45
engine of compound growth. You do. And furthermore,
11:48
we have to examine the actual composition of
11:50
those massive monthly payouts you are receiving.
11:53
Investors just naturally assume it is all just
11:55
dividends and rich option premiums. Right. In
11:57
reality, to maintain those artificially high
12:00
double -digit yields that the marketing departments
12:02
promised, a significant portion of the payout
12:05
is often something called return of capital,
12:07
or ROC. Now, return of capital sounds harmless,
12:11
but it is a massive red flag, isn't it? Oh, yes.
12:14
It literally means the fund did not make enough
12:16
actual profit to pay you, so they are simply
12:19
handing you back your own original investment
12:22
money to make up the difference. Exactly. It
12:24
is not an investment return. It is a return of
12:27
your principal. And this triggers a complex,
12:31
often misunderstood, tax consequence regarding
12:33
your adjusted cost base, or ACB. Ah, tax! Yeah,
12:38
think of your adjusted cost base as the official
12:40
receipt that proves to the government exactly
12:42
what you paid for the investment. When a fund
12:45
hands you a return of capital giving you your
12:47
own money back, they essentially cross out your
12:49
original receipt and write in a lower number.
12:52
Your ACB drops. OK, so it defers the tax pain
12:55
today, but it is building a time on for tomorrow.
12:57
Because when you eventually decide to sell that
13:00
fund entirely, the government taxes you on the
13:03
capital gain, which is the massive gap between
13:05
your final selling price and that new artificially
13:08
lowered receipt. You end up with a surprise tax
13:11
bill on money that was essentially just your
13:13
own principle being handed back to you in slow
13:15
motion. Right. So to summarize the covered call
13:18
dynamic, you are trading away the market's absolute
13:22
best days. in exchange for upfront cash and a
13:25
deferred tax headache. Brutal. But suppose you
13:27
understand this. Suppose you don't care about
13:29
chasing monthly cash. What if your sole objective
13:32
is to capture all that beautiful upside growth,
13:35
but you want to build an unbreakable wall to
13:38
protect your portfolio against the market's devastating
13:41
2008 -style crashes? Well, to achieve that, you
13:44
need the exact opposite trade. And that brings
13:46
us to the second strategy on our deep dive, the
13:48
protective put. If a covered call is selling
13:51
your upside, A protective put is literal, unadulterated
13:55
investment insurance. Let's look at the mechanics
13:58
here. In this scenario, you still own the shares,
14:00
but instead of selling a call option, you step
14:03
into the market and you buy a put option. Right,
14:05
and buying a put gives you the absolute right,
14:08
though again not the obligation, to sell your
14:11
shares at a firmly set strike price on or before
14:14
the expiration date. By purchasing this contract,
14:17
you engineer a hard floor beneath your portfolio,
14:20
no matter how violently the stock plummets. I
14:23
mean, even if the company goes entirely bankrupt,
14:25
you hold a legally binding contract, forcing
14:28
someone else to buy your shares at that strike
14:30
price. Wow. So it is the ultimate peace of mind.
14:32
It is. But, you know, just like the insurance
14:34
policy on your car or your home, that peace of
14:36
mind comes with a mandatory out -of -pocket cost.
14:39
Always. You have to pay the premium up front
14:41
to buy the put. And the harsh reality is you
14:44
pay that premium whether your house burns down
14:46
or not. Let's weave this into our previous market
14:48
journey just so the numbers make sense. You still
14:51
own those 100 shares at $50. $5 ,000 of your
14:55
capital is at risk. Okay. You are worried about
14:57
an impending economic recession so you decide
15:00
to buy a put option with a $45 strike price.
15:05
The market charges you a premium of $2 a share
15:08
for this insurance. Alright so I am paying $200
15:12
out of pocket immediately. My account is instantly
15:15
down $200 on day one. But let's say my fears
15:19
were actually justified. The market enters a
15:21
deep freeze, panic selling takes over, and the
15:24
stock collapses all the way down to $30 a share.
15:27
Right. So if you had simply held the shares without
15:30
protection, your $5 ,000 investment would have
15:33
evaporated down to $3 ,000. It would be a devastating
15:36
blow to your compounding journey. But because
15:39
you hold the put option, You have the contractual
15:41
right to sell those $30 shares for $45. That
15:46
put contract alone is now intrinsically worth
15:48
$15 a share, or $1 ,500. Oh, I see. So my actual
15:52
shares are only worth $3 ,000, but my put option
15:54
is worth $1 ,500. Combined, my portfolio is sitting
15:58
at $4 ,500. Exactly. And if you subtract the
16:02
$200 I paid for the premium, my total retained
16:05
value is $4 ,300. Correct. Meaning I am $1 ,300
16:11
better off than the unprotected investor who
16:14
just rode the stock down into the abyss. The
16:17
floor held completely firm at $4 ,300. The stock
16:22
could literally drop to zero, and I would still
16:24
have $4 ,300. You successfully transferred your
16:27
catastrophic risk to someone else. But, you know,
16:30
we must evaluate the other scenarios to understand
16:32
the true cost. Right. What if your fears were
16:34
overblown? What if the economy stabilizes and
16:37
the stock just stays flat at $50? Well, in that
16:39
case, my put option expires completely worthless.
16:42
I didn't need the insurance. My shares are still
16:44
worth $5 ,000. But I permanently lost the $200
16:48
I spent on the premium. I am sitting at $4 ,800.
16:53
I am $200 worse off. And what if the market ignores
16:56
your fears entirely and the stock goes on a massive
16:59
rally up to $65? The exact same outcome for the
17:03
option, I guess. The put expires workless. My
17:07
shares grew to $6 ,500, which is fantastic, but
17:12
I'm still out the $200 premium. Right. So I have
17:15
$6 ,300. Once again, I am $200 poorer than if
17:19
I had just done nothing. Exactly. This exposes
17:22
the harsh structural reality of the protective
17:25
put as an ongoing strategy. You are financially
17:28
worse off in every single conceivable scenario
17:31
except for a massive catastrophic crash. You
17:33
know, it is essentially like buying a brand new,
17:37
highly expensive fire insurance policy for your
17:40
house every single day of the week. Yes. Buying
17:42
it once ahead of a specific earnings report or
17:44
major geopolitical event makes tactical sense.
17:47
But paying for a protective put every month,
17:49
year after year, creates a continuous bleeding
17:51
of capital. Eventually, the premiums you pay
17:54
cost more than simply rebuilding the house if
17:56
it actually burns. That constant bleeding is
17:59
a permanent drag on a portfolio. If you are paying
18:02
two or three percent of your portfolio's value
18:05
every few months for protection, it requires
18:07
your underlying stocks to generate massive market
18:10
-beating returns just to break even on the insurance
18:13
costs. Over a 20 -year investing horizon, that
18:17
continuous cost will consume a shocking percentage
18:20
of your compound growth. And because that ongoing
18:23
insurance premium becomes such a massive, visible
18:26
financial drain, investors inevitably start hunting
18:30
for a mathematical loophole. They always do.
18:32
They look at the market and ask, is there a way
18:34
I can get this unbreakable protective floor beneath
18:36
my portfolio without having to bleed out out
18:39
-of -pocket cash every single month? And that
18:42
perfectly sets up the strategy that attempts
18:44
to merge both sides of the aisle. The caller?
18:46
Right, the caller strategy and the massive hidden
18:49
tax traps that come with it. The caller strategy
18:52
is a truly fascinating piece of financial engineering.
18:55
To build a collar, you simultaneously execute
18:58
both of the trades we just discussed. Okay, walk
18:59
me through that slowly. You buy a protective
19:01
put at a lower strike price to build your unbreakable
19:05
floor. At the exact same time, you sell a covered
19:08
call at a higher strike price to create a cap.
19:11
You take the premium cash you collect from selling
19:14
away your upside, and you immediately use it
19:18
to fund the purchase of your downside protection.
19:20
It's elegantly simple in theory. The income from
19:24
selling my future upside literally pays for the
19:27
insurance policy on my downside. Precisely. The
19:30
end result is a floor and a cap, functioning
19:32
simultaneously, often engineered so the premium
19:34
collected exactly matches the premium paid, creating
19:38
a net zero upfront cost. Right. It is highly
19:41
coherent from a purely mathematical standpoint.
19:44
You don't pay any out of pocket cash and your
19:46
downside is totally secured. But, and this is
19:49
a huge, but if I use a caller to lock my returns
19:51
into this incredibly safe perfectly defined little
19:54
box. Haven't I just successfully engineered my
19:56
way out of making any real meaningful money?
19:59
You really have. You have entirely neutralized
20:01
the equity risk premium. You've engineered an
20:04
incredibly narrow, restricted range of possible
20:07
outcomes. And that is entirely contrary to what
20:10
long term equity investors need to achieve to
20:13
outpace inflation and build wealth. You are taking
20:16
on all the friction and complexity of the stock
20:18
market, but engineering away the historical returns.
20:22
But, you know, the restricted returns aren't
20:23
even the most dangerous part. There is a massive
20:26
complication lurking in the shadows of these
20:28
strategies, specifically regarding how they interact
20:31
with taxes in a non -registered taxable investment
20:35
account. We need to shine a light on the hidden
20:38
dangers of assignment. This is where perfectly
20:40
good mathematical theories crash into the brick
20:42
wall of the tax code. Yeah. If you are running
20:45
covered calls or caller strategies in a taxable
20:47
account, you must deeply understand the tax consequences
20:50
of your shares being culled away. If the stock
20:53
price rises past your short call strike price
20:55
and the buyer exercises their option, your shares
20:58
are forcefully removed from your account. And
21:00
the government, whether it is the CRA or the
21:03
IRS, doesn't care that it was an automated options
21:05
assignment. To them, forced selling is officially
21:08
a disposition of assets. Exactly. It is a disposition.
21:11
And a disposition forces an immediate taxable
21:14
event. Wow. Imagine you have held a core position
21:19
in a great company for 10 years. You bought it
21:22
at $20, and it's now trading at $100. You have
21:25
a massive unrealized capital gain. A great problem
21:29
to have. Right. But you decide to run a caller
21:32
on it just to feel safe for a few months. The
21:35
stock jumps, the call is assigned, and your shares
21:37
are gone. You just instantly triggered a capital
21:40
gains tax on that massive $80 per share profit.
21:44
And you may not have wanted to realize that gain
21:46
for another 10 years. Exactly. You might have
21:48
been planning to pass those shares down to your
21:50
heirs or, you know, sell them in a year when
21:52
your income bracket was vastly lower. But the
21:55
mechanical nature of the option contract violently
21:58
takes that choice entirely out of your hands.
22:01
It shatters long term tax planning. The deferred
22:04
tax advantage is one of the most powerful tools
22:06
in an investor's arsenal because it allows your
22:08
capital to compound on money that you technically
22:11
owe the government. but haven't paid yet. Right,
22:13
you're earning returns on their money. When you
22:15
force a disposition, you lose that leverage.
22:18
You pay the tax today, leaving you with a much
22:20
smaller base of capital to reinvest tomorrow.
22:23
So you thought you were being clever by engineering
22:25
a perfectly safe, comfortable box with no upfront
22:28
cost. But the true, hidden cost of that box is
22:32
the destruction of your portfolio's tax efficiency
22:34
and your long -term compounding growth. That's
22:37
exactly right. Well, let's pull all of these
22:39
threads together to clearly see what this means
22:41
for your financial journey. A covered call sells
22:44
your right to the market's most explosive days
22:47
in exchange for a small premium right now. It
22:50
masquerades as income, but it mathematically
22:52
caps your growth. A protective put buys a firm
22:55
floor to stop your losses during a crash, but
22:58
it requires a constant drain of upfront premiums
23:00
that you pay whether the market crashes or goes
23:03
on a historic bull run. And while covered call
23:06
funds are relentlessly marketed as safe income
23:08
generating vehicles, you must always look past
23:11
the yield and demand to see the total return
23:13
over a full market cycle. Ultimately, protection
23:15
in financial markets is never ever free. You
23:19
always pay for it. You either bleed out in upfront
23:22
cash premiums or you bleed out in the silent
23:25
massive opportunity cause of capped upside and
23:28
tax inefficiency. Which leaves us with a lingering
23:30
thought for you to carry with you this week.
23:32
Let's just sit with this for a second. Think
23:34
about the deep fundamental asymmetry of these
23:37
trades. If everyday retail investors are systematically
23:41
selling away their market upside through covered
23:43
calls and callers, just to get the psychological
23:46
comfort of a monthly yield, who exactly are the
23:50
institutional players on the other side of those
23:52
trades happily buying up all that upside? It's
23:55
a zero -sum trade on the contract itself. For
23:57
every seller, there is a buyer. If retail investors
24:00
are desperate to sell the right to the market's
24:02
best days for a few dollars today, sophisticated
24:05
institutional algorithms and hedge funds are
24:07
the ones accumulating those rights. What does
24:09
it tell you about the true price of comfort if
24:12
the smartest, most resourced players in the market
24:15
are perfectly happy to pay you a small, comforting
24:18
premium today, knowing it allows them to capture
24:21
all the massive compounding growth of tomorrow?
24:23
It is a question absolutely worth asking yourself
24:26
the next time you open a glossy brochure for
24:28
a fund promising the best of both worlds. Definitely.
24:31
Thank you so much for joining us for this deep
24:33
dive. Take this knowledge, let the mechanics
24:36
sit with you, and use it to always look past
24:38
the labels. Until next time, keep looking beneath
24:42
the surface.