Posted by bfosterpdx on 6th of Feb 2018 at 12:31 pm
Hi Steve, How about a tutorial on insurance for us to have
something positive to think about as things shake out? Put out some
specifics using the latest situation. i.e. if we were long a given
amount on SPY or XIV, and it's overextended, then here is how to
put on insurance. What instruments? What proportion? What trade
type? I think empathy and education would be good to focus on right
now, so everyone can be prepared better in the future. Thanks.
There are many ways to put on insurance such as buying calls on
the VIX or employing an inverse market ETF (so many variables
depending upon ones holdings, style, risk tolerance).
Remember sometimes insurance is money out of pocket and thus
investors choose not to employ and get complacent. These
leveraged instruments all vary in how the perform (relative to
their underlying root instrument) and I'm by no means an expert in
all such products but have seen far too much damage done by those
betting heavily (greed) with instruments that they simply don't
understand. Not only that, but they put way to great of
percentage in one holding without being
prudent/diversified.
However, another solution is to simply SELL into extended moves
and reduce exposure when the ducks are quacking. I learned that
lesson in 1999/2000 in a big way after letting many gains
evaporate. Most importantly, one must devise a plan
that is commensurate with ones objectives etc. You can
contact me via phone (send me a private message) and I can provide
some examples AFTER hearing your style.
I preached both of these ad naseum over the past few weeks and
some chose to ignore due to greed. Passive investment has
won out over the past few years and thus investors have become more
complacent - maybe it's time for active managers to
shine.
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Hi Steve, How about a
This is why one buys insurance when things are complacent ...
Posted by bfosterpdx on 6th of Feb 2018 at 12:31 pm
Hi Steve, How about a tutorial on insurance for us to have something positive to think about as things shake out? Put out some specifics using the latest situation. i.e. if we were long a given amount on SPY or XIV, and it's overextended, then here is how to put on insurance. What instruments? What proportion? What trade type? I think empathy and education would be good to focus on right now, so everyone can be prepared better in the future. Thanks.
There are many ways to
Posted by steve on 6th of Feb 2018 at 12:45 pm
There are many ways to put on insurance such as buying calls on the VIX or employing an inverse market ETF (so many variables depending upon ones holdings, style, risk tolerance). Remember sometimes insurance is money out of pocket and thus investors choose not to employ and get complacent. These leveraged instruments all vary in how the perform (relative to their underlying root instrument) and I'm by no means an expert in all such products but have seen far too much damage done by those betting heavily (greed) with instruments that they simply don't understand. Not only that, but they put way to great of percentage in one holding without being prudent/diversified.
However, another solution is to simply SELL into extended moves and reduce exposure when the ducks are quacking. I learned that lesson in 1999/2000 in a big way after letting many gains evaporate. Most importantly, one must devise a plan that is commensurate with ones objectives etc. You can contact me via phone (send me a private message) and I can provide some examples AFTER hearing your style.
I preached both of these ad naseum over the past few weeks and some chose to ignore due to greed. Passive investment has won out over the past few years and thus investors have become more complacent - maybe it's time for active managers to shine.