For those of you active in the chat, you saw that we discussed buying some SPY puts a couple weeks ago and VXX calls on Monday. The SPY puts are up about 50% and the VXX calls have roughly doubled in 4 days. How you manage these depends on how greedy you are.
In this section you will find Fundamental Trends investment ideas, research, model portfolios 401(k) Alerts. Fundamental Trends offers investment ideas in three categories: Stocks, ETFs, Options & 401(k) Asset Allocation.
What truly makes this investment letter different is our approach to buying and selling which is managed for risk differently than most others. We make extensive use of “limit orders” and cash-secured put option selling to scale into positions and secure low costs basis.
With the VIX extremely low, that virtually always signals at least a couple weeks of volatility coming. Most investors can use this opportunity to raise cash. Traders have another opportunity.
With the flow of money out of “old economy” and “grandpa stocks”continuing, using corrections to upgrade our asset allocation is an essential idea. Already, we have raised cash on anticipation of a summer correction. I anticipate that the summer correction will be short and shallow, lasting no more than a few months and probably not correcting more than 10-20%.