Keep an eye on October Options Expiration week, Oct 21
I've read several bull and bear analyses on how Oct. Opex may affect the overall market. One opinion is that we are in s short term bounce currently, and OpEx week could kill the bounce and go lower. Another opinion is that historically October OpEx is a rebound week. This is my current strategy (disclaimer: I'm not an expert trader but not amateur, 20 years of self-managing my portfolio)
1. I'm using the current bounce to sell some short term buys during the couple month rally before the last Fed hike and the following market drop. Taking a roughly break-even approach to avoid tax consequences. Not selling entire positions just break even lots.
2. Holding high dividend stocks, especially preferred stocks and energy partnerships. Low volatility, high returns (6 to 9%). That helps to keep up with inflation.
3. Holding cash and researching safe haven dividend and cash equivalent high yield securities. Example: interest even on money market funds is quickly rising. Income ETF's as well. Granted, those are boring investments. But now is not the time to have all eggs in one basket.
4. The sideline cash can be deployed when the market has a solid bull trend. It also can be used to make short term buys on temporary bounces, and adding a trailing stop loss or limit sell trigger.
Everyone's financial situation is different, so that strategy may not work for everyone. In my case, that strategy has worked through numerous turbulent market periods, consistently beating the S&P. One more tip: professional advisors often say cash is 'lazy money' and recommend an all-in approach. But there's another factor - opportunity cost. If your whole portfolio is invested, you have to sell in order to buy a new investment. This forces you into a box of selling a good security at a time of disadvantage in order to buy another that's on the rise. Selling a good longterm holding that's cutrently in a rut and/or tax consequences that may be better suited in another tax year, can be a huge strain on your big picture financial goals
1. I'm using the current bounce to sell some short term buys during the couple month rally before the last Fed hike and the following market drop. Taking a roughly break-even approach to avoid tax consequences. Not selling entire positions just break even lots.
2. Holding high dividend stocks, especially preferred stocks and energy partnerships. Low volatility, high returns (6 to 9%). That helps to keep up with inflation.
3. Holding cash and researching safe haven dividend and cash equivalent high yield securities. Example: interest even on money market funds is quickly rising. Income ETF's as well. Granted, those are boring investments. But now is not the time to have all eggs in one basket.
4. The sideline cash can be deployed when the market has a solid bull trend. It also can be used to make short term buys on temporary bounces, and adding a trailing stop loss or limit sell trigger.
Everyone's financial situation is different, so that strategy may not work for everyone. In my case, that strategy has worked through numerous turbulent market periods, consistently beating the S&P. One more tip: professional advisors often say cash is 'lazy money' and recommend an all-in approach. But there's another factor - opportunity cost. If your whole portfolio is invested, you have to sell in order to buy a new investment. This forces you into a box of selling a good security at a time of disadvantage in order to buy another that's on the rise. Selling a good longterm holding that's cutrently in a rut and/or tax consequences that may be better suited in another tax year, can be a huge strain on your big picture financial goals
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Self-directed funding early retirement. 4 yrs now & in the green. Long 75% short 25%. Mix of growth & high dividend.
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