Dalton, Mass. — I made a couple more trades in my portfolio last week, so I wanted to dedicate the bulk of today’s column to keeping you in the know. A couple of my put/call hedged strategies reached a hair’s breadth of achieving their maximum return cap. The way these things work, as the prices go higher, the potential downside is reset. While the downside protection remains from the starting point of the ETFs’ anniversary date, you could “lose” the appreciation you had made up until that point. That was wonky. Let me rephrase. I invested in some things that could…
Exchange Traded Funds
On a daily basis, I review portfolios of stocks and mutual funds from clients and readers. What strikes me most about all these portfolios is that I rarely come across one that has done better than the market. A large part of the problem lies in their choice of investments.
From time to time, a really interesting fund will come to my attention. One such fund, the ETF Market Opportunity Fund (ETFOX), has chalked up some impressive returns over the last several years and appears ready to offer investors a rewarding and safe ride out of this recession. Better yet, the manager, Paul Frank, is a local boy living with his family in Old Chatham, New York.
Traditionally, investors run to cash or bonds, preferably Treasury bonds, when the stock markets decline. They exit, waiting on the sidelines, hoping to re-invest at the lows. Sadly, that strategy has proven to lose investors more money than if they had done nothing. Yet, no one wants to suffer the pain of watching their portfolios go down month after month. My advice is to hedge your investments in dire times like these with inverse exchange traded funds that protect your portfolio in downturns.