Alright ya'll, the market seems to be in a slump. Oil keeps going up, factories keep shutting down, and the stock market is as low as it was back in March! How do we fix it? Well we can't really, we can just "insure" our investments.
A commenter pointed me towards inverse EFTs. I did a little research and found out these bad boys are great for times like these. When the market goes down, these things grow. But they are a double edged sword, so be careful, when the market goes up, they lose their value.
My Plan
So my investment strategy goes something like this next month: Instead of putting more money into what I've already purchased and continue to lose (I'm down to about $289 of my original $300 EEK!), I'm going to stick $200 into 2 different inverse ETFs ($100 each). This includes DXD and QID, which both reflect how the DOW and the NASDAQ do respectively.
Now I've learned, sometimes I can come out ahead even when both markets go down some, what I'm hoping is that this phase of investments will just keep me in check. I might end up just being even or making tiny amounts of money over the next few months, but it's better then losing money at the rate I am now!
My next investment isn't for another couple of weeks which will give me time to watch how the market continues to perform and how these individual funds will work out for me. Thanks to sharebuilder, there are a bunch of tools to figure out how the funds will help me so I'm not going into this round completely blind.
3 comments:
Hey Great Idea! I would only hope that Frieday is a great day followed by nasty monday and tuesday when we buy so that we get good reaction once again at end of weekend. Perhaps we can look at how EFTs trade usually at beginning of week and end of week and beginning of month and end of month and try an play off the trends! :D
Tony
http://www.moolahblog.com
Hey, I'm going to have an awesome post today that will also give you some options on long term trading, especially in EFTs that short Bond Market. Hope you read it.
Tony
You can buy the QID and the QQQQ (100 shares each) and sell covered calls against them. That way you are delta neutral and will have income. the premiums of the QID are about 3% of the stock price.
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