Hello everyone. I just wanted to check in and say that the virtual portfolio has finished its first week +1 day of trading today. I am proud to say that it is up 2.9%. I think that is excellent considering the diversification and moderate hedging in the portfolio. S&P 500 Ultra Short (SDS) was the laggard of the group, putting me back $835. The portfolio is currently up $2,900, so you can imagine where the portfolio would be without SDS in it. However, I like having a hedge or two (SLV) in the portfolio just in case the European situation gets worse.
I've done some research online about how to properly hedge a portfolio, with nothing much to say for it. The online sources have been pretty poor, so I've ventured onto Amazon to find a book that would explain it. I've found quite a few, and am currently trying to decide which one to purchase. Unfortunately, all of the books on hedging run around $45+. I'll pick one up soon though, as I feel it will be a very important skill to have in the future. What I have found regarding hedging, is that one of the most widely used methods is to hedge with options. I, like probably most of you, know little about options. I've already purchased a book on option trading, however, and plan on delving into that soon. I'll relay any knowledge I learn over to you. Hedging with options seems very methodical and useful, so I am excited to start learning!
Since I don't know how to trade options (yet), I've just used an inverse ETF (SDS) and Silver, in the hopes that they will move in the opposite direction of the market.
I will be watching the market daily, and will make any changes in the portfolio that I feel are necessary. If any of you out there have comments or recommendations regarding stocks or ETFs that I should include in the portfolio, please do share.
For now things look fine, with good data coming out of the U.S., and neutral/not negative news coming out of Europe this last week. As we know, things can change in an instant, so we will have to be on our toes.
With Christmas Eve tomorrow, the big day on Sunday, and a closed stock market Monday, I will be taking a few days off. I will be back sometime next week. Merry Christmas everyone!
Cheers,
EZ
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