which way do we go, which way do we go?
this is post is part of my resolution this year to force myself to post about my buys/sells in 2013. mainly for me but feel free to comment.
i got to this point because i was overconfident in what i thought i could do. even with a background in finance, I ended up foolishly taking unnecessary risks and fooling (lower case f) myself that I could outsmart the market, I got caught up in making short term plays to try and pump up my account while I waited for perfect opportunities to build out my longer term holdings. not Foolish, and i should have known better. by forcing myself to post what actions I am taking, I will hopefully avoid last years pitfall.
for context, i don't expect to have any new money coming in for another year or more and this is a retirement account so there are no tax consequences for selling.
i should know which of the characters I am in this clip in the next month or so... lol.
ok, here goes. I am going to make a play to hedge some of my gains so far this year. I think volatility is going to spike up a bit sometime within the next 60 days. I think that because the market will start to focus more on the question of when tapering will start with September around the corner. That has been the rumored timeframe for when it may begin. Also, Congress returns Sep 9. I'm betting that they will struggle to get anything accomplished and that there will be a staredown of sorts on things like the debt ceiling and any other pressing matter that needs to be dealt with soon. I don't think these things are a positive for the markets in the near term. With the year the markets have had so far I think this may be a trigger for a pullback.
that's my hunch. just a short term trade. and i will be looking for deals on some of the companies i own and want to own.
I have to remind myself that I have had great success this year not speculating and just buying good companies. up 36% or so YTD, vs a market that is up roughly 18-19%. So I will keep this trade to minimum.
on Aug 20, I am buying Oct13 VXX options with a strike of $15 for $1.58.
I will probably hold these for the next 30 days or so and if we do get a pullback these should go up nicely and offset losses in my long term stock positions sort of like a bit of insurance. if things go badly i've got something that will go up in value.
if not, then let the good times roll.