|Famed Billionaire Investors Have Turned Very Negative Recently!|
Should You Be Concerned?
You Have Many Choices:
I choose the third option.
Stocks have been in a trading range for the better part of the past two years.
There have been violent moves down to 1810 on the S&P 500 index and rallies up to 2135, The trading range has been the opportunity.
I believe a continuation of this trading range is likely with the outside possibility of a severe decline if the worldwide debt bubble bursts.
What Should You DO?
Buying index funds or a diversified portfolio of ETF’s is not working.
Focusing on leading growth stocks purchased at the low end of their trading range is working.
What is desirable ?
A portfolio of the best stocks purchased at the low end of their trading band.
We need income generation and a plan for risk control.
Executing this strategy is like having your own personal hedge fund.
We can help you do this!
Your Personal Hedge Fund
This type of account is managed in an individual brokerage account. It requires margin privileges, options and may be an IRA. Generally, the size of the account must be over $200,000 in order to provide proper diversification and allow for option writing.
This type of account invests in quality stocks, ETF’s and uses options to generate immediate income and reduce risks. The account is hedged by using S&P 500 put options and uses inverse funds when risk is deemed to be at its highest. Generally these inverse funds are used on a temporary basis while the S&P 500 options are used longer term as a hedge against the volatility of long stock holdings.
A key to this portfolio is discipline in making stock purchases.
Stocks are purchased at or near stock channel lows. Put options are often sold to buy stock at a discount or to generate additional immediate income.
This is a focused portfolio meaning that when fully invested stock holdings are fewer than thirty positions. Covered calls are written against profitable positions when the stocks are at or near their channel tops. If a position with a call written against it is performing poorly a call with a higher strike price is purchased at a nominal cost and the underlying stock is immediately sold. If a stock performs well and the option sold rises in price we may purchase another 100 shares of stock and if it continues to rise we will sell another out of the money call at a yet higher strike price.
All stock positions are sold if they decline by 15%.
Stocks that are under-performing in the portfolio are sold or put options are purchased to limit risk. Stocks are sold if fundamentals change negatively or if legal or accounting issues arise. Large insider sales may also be a reason to exit a position.
This type of account is designed to reduce negative volatility and we believe will be more likely to provide reasonable returns in a difficult market environment. It should be more comfortable than traditional portfolio’s during periods when markets are declining.
Stocks are selected based on forecast earnings growth at a reasonable price. Securities used come from a database of Dow stocks, the Disciplined Equity Portfolio Stocks, the higher priced Zack’s #1 for timing stocks and industry leading stocks in market sectors. Both leading foreign and domestic securities are used.
Stocks are actually purchased based on buying at discount prices near channel bottoms.
Of course past performance is no guarantee of future results. Over any given time frame accounts may experience loss instead of gain.
We have other tools to define exactly when to buy or sell naked puts at strike prices below the low after a turn to the positive.We Buy a stock when it goes above the lower trading band and sell call options at or above the higher band when the stock price loses momentum .
Some stocks will not work out. For this reason you need a stop sell order or your own system of daily price control.
I use long term monthly charts to understand the long term trend, daily charts to determine the zone to buy and 15 minute charts to determine the hour to buy.
You are welcome to see how this portfolio works by viewing our portfolio and our decision system on a go to meeting webinar. Pictures are more easily understood than words. Please call the number below or email me at email@example.com to set up a meeting.
All investments have risk. Past performance is no guarantee of future results. This type of investing is not suitable for everyone. Call me at 860-963-0722 and I will answer your questions. This is not personal investment advice. This is published for informational purposes only.