Building an All-Weather PMCC Portfolio

Most investors try to diversify the hard way.

They buy a pile of ETFs spread across "different" asset classes, pat themselves on the back for being sophisticated…then discover something uncomfortable during the next market stress event:

Everything moves together anyway.

Correlations spike. Diversification dissolves exactly when you need it most. And you realize you've been holding a bunch of different tickers that are all basically the same bet.

Now, I'm not going to pretend that Poor Man's Covered Calls magically fix correlation. They don't. No strategy does.

But PMCCs do give you something that traditional buy-and-hold portfolios often lack:

Room.

Room to diversify across strategies, timeframes, and genuinely different asset classes, because you're not locking up full share capital in every single position.

That breathing room matters. It's the difference between building a portfolio and just accumulating positions.

Today, I want to show you how to build a portfolio-first PMCC framework using an All-Weather approach as the structural backbone. It's simple, repeatable, and designed to survive more than one market regime.

We'll use GLD (gold) as our detailed example, working with current market data as of January 11, 2026 (last trading session: Friday, January 9th).

But first, let's talk about why PMCCs make sense as a portfolio construction tool in the first place.

Why PMCCs Make Portfolio Construction Easier

A Poor Man's Covered Call isn't just "a covered call with LEAPS instead of shares."

That's the mechanical description. But it misses the strategic point.

Done correctly, a PMCC is a two-layer portfolio building block:

1. Core exposure: A deep ITM LEAPS call that behaves like stock

2. Income overlay: A short-dated call sold against it that reduces your basis over time

The key benefit is obvious but chronically underappreciated:

You get stock-like exposure while deploying significantly less capital.

And here's what matters: that doesn't mean "more leverage for leverage's sake." It means more optionality in how you construct your portfolio:

• You can spread exposure across genuinely uncorrelated assets

• You can maintain meaningful cash reserves (instead of being 100% invested)

• You can run multiple portfolio sleeves simultaneously, All-Weather, Small Dogs, Growth/Value, sector rotations, without concentrating all your risk in one giant equity bucket

This is the part most people miss. They focus on the trade mechanics and ignore the portfolio math.

The real power of PMCCs isn't squeezing out a few extra percentage points. It's the architectural flexibility to build something more durable than a collection of random positions.

The All-Weather Idea (And the PMCC-Friendly Version)

The classic risk-parity style All-Weather portfolio has a simple premise:

Build exposure to different return drivers that don't all move together.

The original Bridgewater framework targeted something like:

• Meaningful exposure to stocks (growth)

• Meaningful exposure to bonds/treasuries (deflation protection)

• Meaningful exposure to commodities/gold (inflation protection)

• Some international diversification (different economic cycles)

The exact percentages matter less than the underlying principle: you want assets that respond to different economic environments.

Now, here's the practical constraint we face with PMCCs:

Not every asset class has liquid options with viable LEAPS expirations.

So the version that actually trades well using PMCC structures becomes something like:

• TLT (long-duration Treasuries)

• SPY (US large-cap equities)

• EFA (developed international equities)

• GLD (gold / real assets)

These four ETFs give you exposure to genuinely different return drivers. And critically, they all have the options liquidity and LEAPS availability you need to execute PMCCs without getting picked apart by wide spreads.

For example: GLD currently has listed expirations extending to January 21, 2028, which is exactly what we want for the LEAPS layer of this strategy.

Your Non-Negotiable ETF Filters (PMCC Edition)

Before we talk allocation percentages or position sizing, the underlying ETF has to qualify.

Here are the three filters I use:

1. It Must Represent a Real Portfolio Sleeve

If it doesn't earn a legitimate seat in an All-Weather style portfolio as an asset class, it doesn't belong.

"Because it has liquid options" isn't enough. We're building a portfolio, not collecting trades.

2. Liquid Options Markets

This means:

• Tight bid/ask spreads (preferably a few pennies, max a nickel)

• Consistent volume and open interest across strikes

• Multiple market makers competing for your order

If spreads are sloppy, PMCC math breaks down fast. You'll leak edge on entries, exits, and rolls, and that erosion compounds over time.

3. True LEAPS Availability

You want expirations 18 to 24+ months out when you initiate the position.

Why? Because deep ITM LEAPS with plenty of time behave like stock. They track the underlying closely without the time decay friction that makes shorter-dated calls problematic as core exposure.

For GLD, that means looking at the January 2028 expiration cycle when you're building the position in early 2026.

The "Portfolio-First" PMCC Template

Here's the repeatable structure I use when building PMCC portfolio positions.

You can apply this framework to any sleeve, equities, bonds, gold, international, as long as the underlying meets the filters above.

Step 1: Buy the LEAPS (Core Exposure)

This is your synthetic stock position. Target guidelines:

Expiration: 18 to 30 months out (or the farthest liquid option available)

Delta: ~0.75–0.85 (deep ITM, stock-like behavior)

Extrinsic value: Keep it reasonable. Don't overpay for time you don't need just because it's "farther out."

The goal here is simple: lock in stock-like exposure while deploying a fraction of what 100 shares would cost.

Step 2: Sell the Short Call (Income Layer)

This is where you start harvesting premium to reduce your basis. Target guidelines:

DTE: ~30 to 60 days (enough theta decay to matter, manageable gamma risk)

Delta: ~0.20 to 0.35 (high-probability income, not "hope trades" far OTM)

Profit-taking: Harvest gains early, often at 50 to 75% of max profit, rather than grinding for the last few pennies

The short call isn't about "getting called away." It's about consistent basis reduction, month after month, cycle after cycle.

Step 3: Track Basis Reduction Like an Operator

Last week's article on PMCC income math matters here.

Because PMCC portfolios only stay honest if you track:

• Net debit (LEAPS cost minus short call premiums collected)

• Net premium over time (after buybacks, rolls, adjustments)

• Effective basis (your real cost after income harvesting)

• Yield on deployed capital (premium collected relative to capital tied up in LEAPS)

This isn't busywork. This is how you know whether your PMCC portfolio is actually working, or just generating activity.

The GLD Example (Using Current Prices)

Let's make this concrete.

As of the last market close (Friday, January 9, 2026), GLD is trading at approximately $414.48.

If you wanted to buy 100 shares outright, you'd deploy:

$414.48 × 100 = $41,448

That's fine if GLD is your only position. But it crowds out diversification fast. You can't build an All-Weather portfolio if 40% of your capital is locked in gold shares.

The LEAPS Layer (January 2028)

Instead, let's look at a deep ITM LEAPS: the January 21, 2028 $365 call.

Based on recent market data, this contract is trading around $92.20 (that's $9,220 per contract).

So instead of tying up $41,448 in shares, your core GLD exposure costs closer to:

$9,220 (give or take, depending on execution)

That's roughly 22% of the share capital for virtually identical exposure. That 78% savings allows for even further diversification due to the strategy’s capital-efficiency.

This is the capital efficiency lever that lets you build an actual portfolio instead of one oversized position.

The Short Call Layer (February 20, 2026)

Now we sell a call 30 to 60 days out to start generating income.

From the February 20, 2026 expiration chain, a reasonable strike to consider is the $435 call, currently trading around $5.90 ($590 credit per contract).

This gives you the classic PMCC structure:

• Long: Jan 2028 $365 call (core exposure)

• Short: Feb 2026 $435 call (income overlay)

• Net debit: Reduced immediately by the short call premium

What the Income Math Actually Looks Like

Let's walk through the numbers cleanly:

LEAPS cost (example): $92.20
Short call credit (example): $5.90
Net debit: $86.30 (≈ $8,630)

Now, that $5.90 short call premium relative to your LEAPS capital is meaningful:

$5.90 / $92.20 ≈ 6.4% for that single 40-day cycle

That's based on last-trade snapshots, which brings up two important reality checks:

1. "Last trade" is not your execution price.

You still need to work limit orders, respect bid/ask spreads, and trade intelligently. These are examples to illustrate the structure, not instructions to blindly hit the market button.

2. Not every cycle pays the same.

Some months the premium environment is rich. Some months it's thin. The goal is durable income harvesting over time, not perfect symmetry every 30 days.

But this example demonstrates why PMCC portfolios can be so powerful in real-asset sleeves like GLD, especially when options markets cooperate and implied volatility gives you something to work with.

How to Size an All-Weather PMCC Portfolio (The Part Most People Skip)

Here's the critical mental shift:

You do NOT allocate by share value or ETF market cap.

You allocate by net debit exposure and portfolio role.

In a PMCC portfolio, your "capital at work" is the LEAPS debit (net of income collected), not the notional value of the underlying shares.

This changes everything about how you think about position sizing.

A Simple, Practical Allocation Framework

1. Pick Your Cash Reserve First

PMCC portfolios fail when you're forced to manage from a corner, when you have to do something because you're out of liquidity.

A reasonable starting point:

20 to 35% in cash (especially while you're building the portfolio or navigating uncertain regimes)

Don't think of cash as "idle." Cash is control.

Cash gives you:

• Roll flexibility (you can adjust positions without forcing sales)

• Defense flexibility (you can add to winners or repair losers)

• Opportunity flexibility (you can act when markets dislocate)

The investors who blow up aren't the ones who "didn't see it coming." They're the ones who saw it coming and couldn't do anything about it because they were 100% invested.

2. Allocate PMCC Sleeves by Purpose

A PMCC-friendly All-Weather split might look something like:

• Rates sleeve (TLT): Meaningful weight (ballast, deflation hedge)

• Equity sleeve (SPY): Meaningful weight (growth engine)

• International sleeve (EFA): Moderate weight (geographic diversification)

• Real asset sleeve (GLD): Moderate weight (inflation hedge, crisis behavior)

Why these four?

Not because Ray Dalio said so. But because you're building a portfolio that survives more than one kind of market.

When equities struggle, bonds often help. When inflation heats up, gold tends to respond. When the US market gets expensive, international can offer value.

No guarantees. No magic. Just thoughtful exposure to different economic drivers.

3. Diversify Inside Each Sleeve Carefully

This is where people get sloppy.

They say "I'm diversified" because they own six different positions...but all six are equity beta dressed up in different tickers.

In a PMCC portfolio, your hidden concentration risks include:

• Equity correlation (SPY, QQQ, IWM all move together more than you think)

• Volatility regime shifts (when VIX spikes, short calls across all sleeves get painful simultaneously)

• Short-call gamma risk during fast rallies (everything feels fine until price gaps through all your strikes at once)

• Duration sensitivity in bond ETFs (TLT behaves very differently than SHY)

The solution isn't more tickers. It's fewer, cleaner exposures.

Four well-chosen sleeves with disciplined execution will outperform twelve random PMCCs any day.

The Roll Rules That Keep an All-Weather PMCC Portfolio From Blowing Up

You don't need fancy. You need consistent.

Here are the boring, unglamorous rules that actually keep PMCC portfolios working over time.

Short Call Management (Income Layer)

Common "keep it boring" guidelines:

Take profits when you can, often at 50% to 75% of max profit

Why close early? Because:

• You harvest most of the theta decay in the first half of a trade's life

• You reduce gamma risk before expiration week chaos

• You free yourself up to sell the next cycle without assignment stress

If price accelerates and the short call becomes a problem, roll before it becomes emotional

This means: if your short call goes deep ITM and you're staring at an unrealized loss, don't freeze. Roll out in time, potentially up in strike, to keep the position manageable.

Favor rolling to maintain time + distance, not to "win the argument with the market"

Your job isn't to prove you were right. Your job is to harvest premium consistently over time.

LEAPS Management (Core Layer)

Start thinking about rolling when your LEAPS has ~8 to 12 months remaining

Why? Because once you drop below 12 months, time decay accelerates and your LEAPS stops behaving like stock.

Roll out to re-extend duration and keep the position "stock-like"

This usually means rolling from, say, a 12-month call to a new 24-month call, sometimes paying a net debit to buy back time.

Don't let LEAPS decay become a hidden tax

This is one of the most common ways PMCC portfolios leak performance. People ignore their LEAPS until they're 6 months out, deeply decayed, and expensive to repair.

Roll proactively. It's cheaper.

The Real Reason This Works: Portfolio Math, Not Trade Math

Last week we talked about:

• Basis reduction

• Yield on deployed capital

• Realistic return expectations

This week's article is the extension of that same framework:

A PMCC portfolio is a system.

Your LEAPS are the assets.
Your short calls are the operating revenue.
Your roll debits are operating expenses.
Your basis reduction ledger is the scoreboard.

If you treat it that way, as a small business, not a gambling operation, you stop asking:

"What's the best trade right now?"

And you start asking the question that actually builds wealth:

"What's the best portfolio structure I can execute consistently?"

That second question is harder. It's less exciting. It doesn't make for good social threads.

But it's the one that compounds.

A Simple Build Checklist (Copy This for Your Process)

Here's a practical workflow you can use to build your own All-Weather PMCC portfolio:

☐ Define your portfolio sleeves (e.g., TLT / SPY / EFA / GLD)

☐ Confirm LEAPS availability (18 to 30 months out, liquid strikes)

☐ Confirm options liquidity (tight spreads, reliable open interest)

☐ Set your cash reserve (20 to 35% minimum)

☐ Buy LEAPS first (target 0.75 to 0.85 delta, deep ITM)

☐ Sell short call 30 to 60 DTE (target 0.20 to 0.35 delta)

☐ Use limit orders only (never market orders on multi-leg positions)

☐ Track basis reduction every cycle (know your real cost, always)

☐ Roll short calls before they become "management problems" (50 to 75% profit target or roll before deep ITM)

☐ Roll LEAPS with ~8 to 12 months remaining (don't let decay sneak up on you)

Final Thoughts

Building a PMCC portfolio, especially one structured around All-Weather principles, isn't about finding the perfect trade.

It's about creating a repeatable system that works across different market environments.

It's about capital efficiency that gives you room to diversify properly.

And it's about tracking your basis reduction honestly so you know whether you're actually making progress or just generating activity.

None of this is revolutionary. But it works.

And in a world full of "10X your account" promises and trade-of-the-week hype, boring and repeatable has a strange way of outperforming over time.

If you're building this kind of portfolio, or thinking about it, I'd love to hear how you're approaching it. I’ll be building my All-Weather portfolio this week if you are in terested in following along.

What sleeves are you running? What roll rules are working? What mistakes are you learning from?

Probabilities over predictions,

Andy

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Disclaimer: This is educational content only. Not investment advice. Options involve risk and aren't suitable for all investors. Examples are illustrative. Real results will vary. Talk to professionals before you risk real money.