Get dollar cost averaging. Using dividend reinvestment programs. Having a "see you in 30 years fund" like VOO. Not worrying about market fluctuations.

But sometimes you want some downside protection besides moving to cash. And I'll be the first to admit I don't know much about options, covered calls etc.

We've talked in the past about everyone's Favorite "Fear Gauge" (VIX).

So, I've been dabbling with a strategy, and it seems to offer some downside protection.

Enter the The 2x Long VIX Futures ETF (Ticker: UVIX).

The 2x Long VIX Futures ETF (UVIX) works by seeking to provide daily investment results that correspond to twice the daily performance of the Long VIX Futures Index (LONGVOL).

Today's down market, where the S&P 500 is currently down 1.62% was a good test. The VIX has a yearly range of 10.62-65.73 during an earlier "panic". Has been hovering in the 15's for about a month. Today, it's currently at 20.72, up 33.25%. The market is having it's biggest slide since t "August Meltdown".

Now, UVIX has correspondingly had a 52-week range or $4.02 to $45.82. I've been actively buying when it dips below 5. Not a lot, maybe it's about .75% of the non-retirement portfolio.

Currently, based upon today's market, it's surged to 5.63, a one day increase of 38.33%. All while most of the other ETFs are down 1-2%.

Don't know what the "end game" is for this, but it is proving to be an effective fund when the market tanks. There are winds of market corrections due to the election, job growth, inflation, war. This ETF might be a good tool to mitigate some risk.

This post was edited on 9/3/24 at 3:44 pm