The safest place to be during a market correction is cash. Especially when managing high-risk or for higher returns. Never be in a position where you are hoping the worst may not happen. It takes a 100% return to make up a 50% loss and a 300% return to make up a 75% loss.
Many may feel that a loss isn't a loss unless you sell your stock. But if you have underwater capital for years - even if taking in "income" - you are not really taking advantage of the power of compounding.
I demonstrate this at my new Y! Group - http://finance.groups.yahoo.com/group/CoveredCallFund-Mentoring/
G
From: Stanley P. <jeff@simiangroup.com>
To: compoundstockearnings@yahoogroups.com
Sent: Sat, May 8, 2010 5:08:59 PM
Subject: compoundstockearnings I'm getting killed this cycle
Many may feel that a loss isn't a loss unless you sell your stock. But if you have underwater capital for years - even if taking in "income" - you are not really taking advantage of the power of compounding.
I demonstrate this at my new Y! Group - http://finance.
G
From: Stanley P. <jeff@simiangroup.
To: compoundstockearnin
Sent: Sat, May 8, 2010 5:08:59 PM
Subject: compoundstockearnin
I take higher beta stocks for bigger premiums...like RIMM, AIG, MU, UAUA, DNDN, etc, etc. And when the market drops, they get hammered. Am I alone? Please tell me I'm not. I trade about $1mm a cycle, and I must be down $100k...frankly I'm afraid to look. When the market dives, there's no real downside protection except the offset from the CC premium...which is like fighting a forest fire with a garden house. Ugh. I haven't felt this way since those awful days of '08. I hope they're not returning, via Europe.
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