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Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise. Never buy derivatives as a no
by pid-1 3mo ago
Hold short term debt (e.g money market funds or SOFR ETFs). Then you will have cash in hand if either stocks fall or yelds raise.
Never buy derivatives as a non institutional investor.
- georgeecollins 3mo ago100% this is great advice!
- marojejian 3mo agoWhy should a retail investor never buy derivatives? spreads?
- dboreham 3mo agoNot the parent but I'm guessing: a) it's expensive and b) you can shoot your feet off.
- miningape 3mo ago[dead]
- baal80spam 3mo agoIt's all about getting a call from the dreaded Margin.
- pid-1 3mo agoRetail investors do not have access to systems that calculate risk, margins, pnl, etc... and generally also don't have the necessary knowledge and market data to price such instruments correctly. Most ppl are better off KISSing and lowering risk by selling equity for fixed income.
- jurgenburgen 3mo agoIronically you can use AI tools to get some idea of how to trade puts.
- sitzkrieg 3mo agothis hasn’t been true for years. retail investors can’t get advanced risk suites from any normie broker these days
- inigyou 3mo agoYou almost always lose a lot of money if you're seeking safety. Protection from downside risk on your S&P500 investments may cost 20-30% of your investment at which point you're better off just selling the investment and hoping it doesn't go up by that much.
- baq 3mo agoIt’s scaremongering, you can learn all this stuff. However! If you don’t want to learn and want to get rich quick instead, stay away.
- rich_sasha 3mo agoIt's worth adding that conventional wisdom says, you can't time the market. On average, people shifting between cash and stocks to time shocks lose out over just holding a fixed portfolio.
- dboreham 3mo agoSometimes conventional wisdom stops being wise. Also 90% of the people in charge of conventional wisdom have their personal wealth depend on retail investors not selling.
- pid-1 3mo agoAbsolutely 100% agree. At the same time, one can make financial decisions based on risk rather than longterm expected returns. For instance, I'm happy with fixed income yields rn. What would scare me is losing a big chunk of my portfolio in a downturn, exactly when I'm also most likely to lose my job.
- fhdkweig 3mo agoI moved 80% of my money out of Vanguard's Target Date Retirement funds and into a money market on June 1st. In the 1.5 months since, the remaining Target Date Retirement fund has fluctuated up and down by about 0.1%. It has basically plateaued. I don't think I am losing out on potential short term gains. I like the idea that I have cash available to buy in on the day of the crash.
- wil421 3mo agoMy boss has already done this several times over the past couple years because of some impeding market crash. Then he goes back and buys a week or so later.
- le-mark 3mo agoGood luck dude! This kind of move can pay off big or not, clearly. I’ve personally talked to fable about this a lot, suggest everyone does. There are a lot of failure modes. The dot-com bubble looked obvious in 1997; it popped in 2000. Anyone shorting in '97-'98 was carried out on a stretcher before being vindicated. In fact 2000-2002 fell in three brutal legs over two years, and anyone who leveraged up after the first 25% leg was destroyed by the next two.
- jghn 3mo agowhat if you buy on the day of the crash only to discover that was day one of a year long crash?
- fhdkweig 3mo agoI feel that even if that happens, at least I wasn't fully exposed to the first drop.
- mancerayder 3mo agoThen he's beating those who held right before crash number 1, right?
- jghn 3mo ago
- deleted 3mo ago[deleted]
- sitzkrieg 3mo agoi mostly agree with this (look at the survivor rate of retail traders of any instrument lol) but it is possible to do safely. i’m a few decades in now