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Stock strategy for a market correction.
Posted on 2/5/21 at 9:13 am
Posted on 2/5/21 at 9:13 am
This is hypothetical as I'm not planning on making any changes anytime soon. I just want to have an idea of the possibilities out there.
Without doing shorts, are there any stocks I could hold that would take off in the event of a correction?
Without doing shorts, are there any stocks I could hold that would take off in the event of a correction?
17
Posted on 2/5/21 at 9:21 am to OysterPoBoy
Not sure why you got downvoted but this is a good question and a timely one. I myself am interested in securing the gains without severely capping future gains.
Posted on 2/5/21 at 9:37 am to OysterPoBoy
I think it would be tough with simply stocks, unless you're willing to buy inverse ETF's, which personally I'm not.
Aside from just buying less risky stocks, especially high-dividend yielding ones, I'm not familiar with a straight stock strategy.
Aside from just buying less risky stocks, especially high-dividend yielding ones, I'm not familiar with a straight stock strategy.
Posted on 2/5/21 at 9:39 am to OysterPoBoy
Sell stocks at peak and buy real estate
Posted on 2/5/21 at 10:17 am to OysterPoBoy
I like to have extra cash on hand for the buying opportunities. I got lucky back in the middle of March with high liquidity.
Posted on 2/5/21 at 10:43 am to OysterPoBoy
You can explore minimum volatility funds that typically offer some downside protection. Buying something that actually goes up when the market goes down is a different story altogether. Typically it would be bonds, but at these yields that may not be the case.
Posted on 2/5/21 at 11:10 am to OysterPoBoy
I've been focusing on fundamentals and value lately. Also, a correction also usually brings volatility, so some money in a fund based on VIX could be a good hedge in this instance. I have a chunk of money I keep in such funds. When VIX spikes, I buy an inverse fund SVXY. When it drops back down I sell that and buy VXX. When it goes back up, I sell that and buy the inverse fund again.
Posted on 2/5/21 at 1:14 pm to OysterPoBoy
I'll give you a few examples of stocks that didn't hurt too bad in 2008. McDonalds and Walmart. Consumer essentials that people will consume just as much if not more during a recession. 2020 probably isn't the best crash to use as a future predictor given that it was almost entirely caused by an external event that affected different segments of the economy in drastically different ways.
Depending on the situation, I'd also prefer a stock going into a recession that is already undervalued rather than trading at a high multiple due to anticipated future growth. So an example of the perfect combination of consumer essential and undervalued stock might be Kraft Heinz. Something like Peleton would be the worst kind to own if you think hard times are coming.
Depending on the situation, I'd also prefer a stock going into a recession that is already undervalued rather than trading at a high multiple due to anticipated future growth. So an example of the perfect combination of consumer essential and undervalued stock might be Kraft Heinz. Something like Peleton would be the worst kind to own if you think hard times are coming.
Posted on 2/5/21 at 1:19 pm to OysterPoBoy
What are you looking to do? Do you want to hedge your individual stocks with puts? Inverse etfs? Buy bitcoin?
This post was edited on 2/5/21 at 1:21 pm
Posted on 2/5/21 at 4:36 pm to OysterPoBoy
UVXY
DOG
SQQQ
SH
Or just sit in cash until the market bottoms & rebounds and get into all the stuff cgrand has already shared (SQ, FSLY, PINS, ROKU, you know...the thing!)
DOG
SQQQ
SH
Or just sit in cash until the market bottoms & rebounds and get into all the stuff cgrand has already shared (SQ, FSLY, PINS, ROKU, you know...the thing!)
This post was edited on 2/5/21 at 5:15 pm
Posted on 2/5/21 at 4:50 pm to OysterPoBoy
VIX calls
SPY puts
Or just take some $ off the table and wait for good companies to go on sale; much easier than timing.
Before jumping into a leverged etf understand volatility decay.
SPY puts
Or just take some $ off the table and wait for good companies to go on sale; much easier than timing.
Before jumping into a leverged etf understand volatility decay.
Posted on 2/5/21 at 4:52 pm to OysterPoBoy
I like the ETF symbol TAIL. I have a limit order in for it now at 19.80. It's a more cautious way to play a downturn. Patiently awaiting the correction.......
Posted on 2/5/21 at 7:34 pm to OysterPoBoy
IVOL
VXX
Commodities
Ur welcome
VXX
Commodities
Ur welcome
Posted on 2/5/21 at 9:46 pm to OysterPoBoy
Personally I like playing spacs under $11. Eliminates a ton of risk, seems to work well.
Posted on 2/5/21 at 9:48 pm to OysterPoBoy
You could buy rolling OTM VXX calls as insurance I suppose. If market keeps getting frothier I might start to do this soon. Don’t know how/when this will end but it will get ugly.
Posted on 2/5/21 at 9:49 pm to OysterPoBoy
Balls out until 2-3 weeks after round 3 stimulus drops. From there, head on a swivel
Posted on 2/5/21 at 11:55 pm to OysterPoBoy
Minimum volatility stocks (SPLV)
Precious metals (SGOL + SLV)
Value focused stock (VIG + SPHD)
Precious metals (SGOL + SLV)
Value focused stock (VIG + SPHD)
Posted on 2/19/21 at 12:45 pm to OysterPoBoy
quote:
Without doing shorts, are there any stocks I could hold that would take off in the event of a correction?
You could in theory buy and hold vix etfs
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