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re: Best Guess When it's time to Pull out the Market?

Posted on 7/1/14 at 11:35 pm to
Posted by TheHiddenFlask
The Welsh red light district
Member since Jul 2008
18384 posts
Posted on 7/1/14 at 11:35 pm to
quote:

Never pull out, reallocate to out of favor sectors or write covered calls to protect yourself from the downside.


This is why people lose all of their money.

ETA: Not this strategy, shitty advice.
This post was edited on 7/2/14 at 5:57 am
Posted by StrangeBrew
Salvation Army-Thanks Obama
Member since May 2009
18185 posts
Posted on 7/2/14 at 7:30 am to
quote:

ETA: Not this strategy, shitty advice.



How about investigate covered calls, would that improve the advice?
Posted by CajunTiger92
Member since Dec 2007
2821 posts
Posted on 7/2/14 at 7:31 am to
quote:

This is why people lose all of their money.


How do people lose all of their money selling a covered call? If the stock goes down and you want to sell the stock then just buy the call back. The calls will be at a price lower than what you sold it. If the price goes up and the call is exercised then you pocket the premium and can just by the stock back.
Posted by Shepherd88
Member since Dec 2013
4597 posts
Posted on 7/2/14 at 12:14 pm to
I think we have pullback at 17k (5% mkt drop). May look at correction mid 2015 when "interest rates rise" so the Fed says. I don't think the correction will be more than 20% though. The mkt tried to have a correction in Jan-Feb, but what you saw is a lot of big companies/hedge funds doing exactly what your doing. They were cash heavy and waiting on the drop. So when the market hit -7% they all bought back in and raised the mkt back up. I think you will continue to see that trend as well.

What you need to watch for though is "dumb money" going into E-Trade type accounts. When there is a mass influx of money going into these accounts, then typically institutional money is flowing out and selling. We're not quite there yet, forward P/E's still show the market is at a discount even though we're at the top of the market.

For the record though, buy and hold is the only proven way.
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