SHORT your own Portfolio
I'm still a NEWB investor here and so take this advice worth a grain of salt because I don't know anything.. not until I at least have 1 full year of experience.... That won't happen till March.
But... In a Bear market that may stretch at least till Q4 2009 if not Q2 2010, why not SHORT your own Portfolio?
Say you have 5 stocks...each at 100 shares give or take.
With the rest of your cash on the sidelines, take about 50% of it to SHORT your underperforming stocks in your portfolio.....and the other money can be used to add to any positions you are LONG on off any dips.
AMAT) SHORT This one due to pre-announced bad earnings report
CAG) ADD to your position on any DIPS if you continue to believe low commodity prices for ConAgra will continue into the next Quarter and so on, bringing good earnings.
Simple right? Or am I mistaken?
Does it make any sense to SHORT your own stocks?
I guess.... If you are shorting your own stocks.... why are they your own stocks you may ask?
Well... I donno.. Maybe they shouldn't be... But maybe you simply want to earn some CASH off of shorting so you can buy shares of an underperforming stock much cheaper later on in the far, far, future... because in the far, far, future you have an optimistic outlook for the company?
For example... Activision struggled badly for years before becoming a market leader.... So, just cause you short Activision during the bad times doesn't mean you eliminate yourself from participating in Activision when things start to look good? You cover your Short and move that stock to a "BUY" when news is good.
Just wondering if this BEAR MARKET Strategy is something I should start getting into this year.
DISCLAIMER: I own 250 shares of AMAT, 435 Shares of ATVI, 0 shares of CAG.