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Read/Watch Time: 39 minutes and important
Thanks for tuning in.
I was at a social gathering the other night. One of my friends (who chooses to work with a different investment advisor) asked “What do you think about this market?” Before I could answer, he said “We don’t even want to look at our statements. We know our accounts are all down but we don’t want to get depressed so we don’t look at the statements. It’s just too painful.” Ouch.
Wall Street has worked hard to convince us that we have no control over our investments going down.
There is a huge difference between small declines in Bull Markets and big declines in Bear Markets.
It’s important for me to have some way of looking at the markets and determining if I should own them or not. I need to be able to trust the system enough to act on the information.
This video covers the main investment markets plus the sectors of the S&P500 and a handful of commodities. There is also a brief discussion of Inverse Funds at the end.
There are a few ways that investors can attempt to make money, or at least hedge their portfolio, when markets go down.
Cash – In a brokerage account and in 401(k) plans there are parking places for money that has not been invested or allocated. It could be a Money Market Fund or Bank Sweep Account or Stable Value Fund, etc… If markets lose 50% and cash loses 0.0%, that is an excellent relative return. Cash also gives us the ability to buy when prices are lower.
Shorting – This is when an investor sells a position that he doesn’t own. The investor borrows that position and sells it. At some point he/she must buy the position back and satisfy the loan. There is heavy risk here and should only be attempted by highly experience investors.
Options – There are several ways to try to profit from declines by utilizing Options. This is a detailed subject and should only be attempted by experienced investors. I will have other training videos on this later.
Inverse/Short Funds – There are ETFs and some Mutual Funds that specialize in strategies like Shorting and Options to attempt to make money on declining markets.
Have you looked at your account lately?
Please feel free to teach this to your family and friends. We appreciate the referrals.
Here is the video link: https://squiggletrader.com/wp-content/uploads/2022/05/Markets-Update-Ouch-05092022.mp4
Cheers!
Bo – Chief Squiggler
Help Yourself. Help Others.
Disclaimer
This communication is not a recommendation to buy or sell any security. It is not to be considered financial or investment advice. This is an educational and training tool only. If a specific security is mentioned, it is for illustrative and hypothetical purposes. You must use your own knowledge to determine what to trade, how much to trade and when to buy or sell. Investing and Trading involves risk and you can and will lose money. Past performance is no indication of future results. You should practice with fake/virtual money (paper trading) before risking real money. All communications and videos are for members only and are not to be shared. Consider all content copyrighted.