The market will crash. The market will go up. Although we don’t know when, we can definitely prepare. Risk is defined differently for different investors. For instance, volatility is a risk for short term investors, companies with weak fundamentals is a risk for long term investors. Several stargerties are discussed below.
Portfolio Risk Management
Below is the dynamic defence against this market volatility as well as long term sustainability. As you can see, the application currently being used is M1 Finance (M1) https://www.m1finance.com/. In this portfolio, the underlying assets are generally predefined. M1 allows for seamless shifting between these funds depending on perceived probable risks.
Since the market is unpredictable, the underlying assets in my portfolio are all fundamentally strong and I do plan to invest over the next 15 years. My approach to risk management is making slight shifts in my portfolio allocations on the first and second levels to as market, sector, and changing industry trends and conditions change. Since I cannot predict the future, the changes are not too drastic. Below are more details on the six pies above.
Forever Funds
Businesses By Sector
During Corona Times
Basically Cash with Dividends
Corona Recovery
The core of my portfolio excludes the two corona pies – these are temporary. The others will remain. As a vaccine is produced, company earnings turns around, and the virus subsides, I’ll slowly shift the percentage from the “During Corona Times” pie to the “Corona Recovery”, ultimately eliminating both pies when things are back to normal.
As a Bonus, here is a link to my full portfolio (which may change tomorrow!) https://m1.finance/IAi6pRzQcyI8
Options Trading
Another strategy that may benefit speculators in these times is options trading… Many new investors turn to robinhood to execute simple trades (buy/sell calls/puts or advanced options trading). Check out this week’s performance with this strategy, executed over a one hour timeframe – talk about speculating.
For speculative options trading, I make very small trades. For instance, this week only include the purchase and sale of one contract of Carnival Cruise Line and Citigroup. Yielding nice gains – PERFECT TIMING. Although the outcome was good, that doesn’t make this a good decision – it could have gone either way (especially when you trade based on a hunch!)
At this point, my only hope is that the market continue to fall so we all can get lots of assets on a discount! And we can use options to profit in the meantime… Let it fall!
There are many other strategies that are explored in the finance section of this website. https://beyondvolatility.com/category/finance/
