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If markets open up on Monday, could this be an indication that the FOMC won't end Quantitative Easing on Wednesday? Will stocks continue to rise up, up, and away?
Is your investment plan on target to reach your goals? If not, what will you need to do differently to reach your goal? Is now the time to revisit your plan to make adjustments, or do you believe in leave it and forget it?
Market timing, buy low, sell high, volatility- yawn no hum how did the sell high and buy low thing do for you lately?
Active v Passive and the winner is? Asset Allocation and your assets within your chosen allocation along with being mindful of fees v return is the winner.
My investment thoughts and strategy for the day are boring. In fact they are consistently boring. I have not bought or sold anything in months. Nor do I intend to do so. Plenty of investors always seem to be worried. They are concerned about QE, or the Chinese economy slowdown or software issues with the latest Apple phone. If an economic indictor is a bit low, they are worried. If the economy does well, they worry that the Fed will increase interest rates.
Many of us small time investors panic but the talking heads and fickle professional investors and advisors seem even worse.
I pay little attention to any of them. The economy continues to recover, many businesses are doing very well and stocks continue to climb within reasonable PE ratios. I cannot begin to time the minor market ups and downs. None of it makes any sense. Instead I try to keep my eye on the big picture and that continues to look good.
Thank goodness for Vanguard founder John Bogle. The man has made it possible to invest in the stock market without being at the mercy of the "fee-skimmers" and scam artists.
I'm a little jaded from giving the same old investment advice (hold a well diversified passive investment portfolio) so let's discuss something different (but somewhat related to investments) for a change..
Quote:
“Optionality is the property of asymmetric upside (preferably unlimited) with correspondingly limited downside (preferably tiny).”
- Nicholas Nassim Taleb.
Call and put options allow you to buy/sell stocks at prespecified prices in the future regardless of the market price, and you pay a premium to have this privilege. But call and put options also exist in real life situations, and often, you pay relatively little (time, money, and/or effort) to obtain these options. Examples:
1) You're an author of a book. Your book sales will skyrocket if you receive viral positive reviews for your book for obvious reasons. But if you receive tons of attacks, criticism, negativity, etc., then you might also see a similar surge in your sales. You're essentially holding LONG Call and Put options on the reputation of your book.
2) There's a party where a bunch of highly influential people will be hanging out near where you live. You go to the party. Most likely you won't impress those folks but you got little to lose by doing this and there's a small probability one of them might take an interest in you. You're holding a LONG Call option on your social network for the cost of one evening at a party.
3) Starting a consulting side business while working a day job: you start a business that requires relatively low initial startup capital. If you fail, you continue working the day job. If it takes off and earns more than your job, you quit your job and work in consulting full time. You're holding a LONG Call option on your career for the cost of a small amount of start-up capital and your evenings spent on the consulting practice.
My advice? Instead of paying up for options on stocks, there are a ton of places in everyday life where you can obtain (the equivalent of) call and put options for free or relatively cheaply. Amass a ton of them and many of them will probably expire worthless but a few will probably pay off (with better odds than from winning the lottery.)
Yawn more of the same. I certainly like being in the most bullish phase of the presidential cycle.
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