Home Market3 Tips for Dealing with Market Uncertainty

3 Tips for Dealing with Market Uncertainty

by admin
19 comments

Posted on MSN Money @ http://money.msn.com/how-to-invest/article.aspx?post=a478d072-8929-4a30-aa70-11d3722e1575

If you’ve been in the market over the last year, you’ve dealt with global uncertainty, European debt crisis, hard landing vs. a short landing in China and an U.S. presidential election. The market hates that evil word…uncertainty! It’s been an uphill battle even with the S&P 500 posting gains of 13% in 2012. For the retail trader, it’s been a tough market to pick stocks when the 2012 darling, Apple (AAPL +0.14%), took a brutal end-of-year sell-off.  

When the standard fundamentals and technical are overrun by sentiment, we have a market like we did last year. Choppy intra-day, and quarterly movements of stocks that have created a difficult market to trade individual, fundamentally sound equities. Let me suggest three ways to potentially improve trading for the small guy…

Look longer term. It may be tough to justify short-term losses for future gains. To be nimble is very hard due to the lack of ability and resources to correctly guess a direction for any period of time. When an investor can step back and purchase fundamentally sound companies at a cheap price, they are usually rewarded longer-term.

Make up some of the downward movement. Basic protective put or in-the-money covered call strategies are great ways to create returns as stocks move to the downside. The protective put acts as insurance on a stock position. You buy to open the right to sell your stock at a certain price for a certain period of time. The put position can make up significant amounts of the downside movement.

Insurance on equity positions gives your portfolio a hedge against the covered call strategy and helps investors receive a credit as they wait for equity positions to come back. An investor can sell to open a call and receive a credit into their accounts. They are now obligated to sell their stock at a certain price for a certain period of time. As a stock falls in value, the investor gets to keep the credit as the option expire.

Stick with what you know. If you are familiar with Apple (AAPL +0.14%) and the price movement, use your knowledge to your advantage. I would challenge anyone to find a better fundamentally sound company than Apple (AAPL +0.14%). Use the option strategies to make up some of the downward movement. When the next big thing comes out from Apple (AAPL +0.14%), you could be rewarded with another huge run-up.

Success comes when the account is closed, not on an individual trade basis. We all can get a big win or suffer some losses. Use the protective put and covered call to get paid when stocks suffer downside movements to lower you cost basis.

 

Disclosure:  I am long Apple (AAPL +0.14%) shares.

Kevin Hurley

OptionsANIMAL Instructor

You may also like

19 comments

sociology thesis March 26, 2013 - 6:39 am

Everyone that’s elsewhere there helping and for the relaxing who are manufacture it potential for them to be present.

Reply
Fabric Sofa Bed April 2, 2013 - 11:56 am

Yes, very useful article, I’ve seen an example of dynamic SEO by a friend of mine that use similar scripts in a announces’ site.

Reply
Urgent Care in Silver April 15, 2013 - 11:15 am

Great technique and one I need to get going for my websites.

Reply
Sonictrades.com April 30, 2013 - 6:40 am

I must say, you’ve got one of the best blogs I’ve seen in a long time. What I wouldn’t give to be able to create a blog that’s as interesting as this. I guess Ill just have to keep reading yours and hope that one day I can write on a subject with as much knowledge as you’ve got on this one! Just visit our branded firm @ Sonictrades.com

Reply
Small Business Loans May 3, 2013 - 7:58 am

Incredible ideas on this website. It’s unusual nowadays to find web sites with information you are searching for. I have read most of them and got a lot from them. To me, you are doing the great.

Reply
London Escort May 6, 2013 - 9:47 am

Very nice post. I really enjoy the reading .Thank you for this excellent details.

Reply
international removalists May 13, 2013 - 8:10 am

So great work, its really so informative and helpful tips. thanks for sharing.

Moving To Europe || Interstate Removalists in Sydney

Reply
SEO Service Australia May 22, 2013 - 7:32 am

Really this site so helpful and knowledgeable for getting trading market knowledge.

SEO Service In Sydney | SEO Company In Sydney

Reply
what is white hat seo June 7, 2013 - 3:15 pm

very nice post, i certainly love this website, keep on it

Reply
Redclays Capital June 21, 2013 - 7:27 am

Great blog. All posts have something to learn. Your work is very good and i appreciate you and hopping for some more informative posts.

Reply
Maria July 8, 2013 - 12:40 pm

I think that these are the best tips to deal with market. Actually this is the first requisite before someone starts any business. Anyways great post. Thanks for sharing.
Fridge Repair Toronto

Reply
jasa pengaspalan August 1, 2013 - 3:07 am

good post, I think a lot of people need articles like this

Reply
padded shorts September 26, 2013 - 9:42 am

Very nice blog on this website. It is really difficult to get this kind of with useful information. I am relieved I came upon this site. I will eagerly look forward to your upcoming updates.

Reply
worst real estate speaker October 28, 2013 - 5:51 pm

Whoever is detected in a shameful fraud is ever after not believed even if they speak the truth.

Reply
on line auctions November 6, 2013 - 2:02 pm

If you’re an employer, you want to hire an employee who’ll do their job, not do your bidding.

Reply
bid 2 win December 3, 2013 - 2:11 pm

His neigh is like the bidding of a monarch, and his countenance enforces homage.

Reply
Water Damage Palos Verdes December 4, 2013 - 4:17 pm

We realize how upsetting and unexpected experiencing water damage can be to your home.

Reply
exhibits in las vegas December 10, 2013 - 2:29 pm

The fact that you are willing to say, ‘I do not understand, and it is fine,’ is the greatest understanding you could exhibit.

Reply
exhibits in las vegas December 10, 2013 - 3:34 pm

The fact that you are willing to say, ‘I do not understand, and it is fine,’ is the greatest understanding you could exhibit.

Reply

Leave a Reply to padded shorts Cancel Reply

Markets move fast and often, so you need a partner who understands the ever-changing investing landscape. We combine our patented simulation and optimization engines with thoughtful human insights to deliver a portfolio tailored to you. And in the process, we bring you institutional rigor you can benefit from as an individual investor.

Contact Details

Money Management Services

We believe everyone deserves to move their financial life forward. For more than 20 years, we’ve offered the tools and expertise to help make that possible.

Laest News

@2025 – All Right Reserved. Hurley Investments