Markets move lower as the bear mood returns. My self-grade for the trading month is C. Like I’ve been saying, I am about half invested. For the year my trading account is -10%, which is bad, but look at major ETFs isn’t terrible.
GLD gold -8.8%
SLV silver -16.4%
SPY SP500 -18.8%
IWM Russell2000 -19.5%
EEM EmergingMkt -22.6%
QQQ Nasdaq 100 -27.3%
TLT US20 yr -27.7%
It is stunning to see all minus signs. The safe haven of Treasury bonds down more than the aggressive Nasdaq100. Cash and near equivalents have been the only place to hide. With a high inflation rate, a person sitting in cash is losing purchasing power.
I have been delta hedging (eg: buying 5 shares, selling a 5 delta call) and bought a few protective puts. All the September puts I bought expired worthless, but hedged against an even worse down move.
When volatility is high, I like to do back ratios for a credit (eg: buy SPY Nov 340 put, sell 2x SPY Nov 320 puts). A person can choose the strikes and expiration to do this for credit or debit. Significant collateral and account approvals are needed. The back ratio does best with a measured down move, makes a tiny bit on a flat or up market, and can suffer in a crash.
I don't see this as a time to try to be a hero. I’m sure a few have done well this calendar year, but far more have lost big. MOre than a few have been completely wiped out. I have limited my trading activity and may shut it down for a short time come November/December.
Good luck to all. I continue to be grateful. Having money to invest means an American is in the upper half because 40% of the population has near zero savings, zero investments.
