lot of you guys would jump in and out of the market or play options or do something else dumb…
Well, in my case you are HALF right. Half correct because I did trade myself out of a lot of profits. Yet you are half wrong because I am still UP THIRTY PERCENT NET over the last twelve months across my entire retirement portfolio.
NOt to mention the ~150K in equity losses we avoided by selling our home within 5% of the real estate market peak.
HOwever, I will grant you THIS:
The lesson I STILL need to learn is to place smart bets, and then LEAVE THEM WELL ENOUGH ALONE.
I bought SDS back in Oct. ’07, at the market peak. That’s a 200% leverage short on the S&P500, an index that is NOW 36% below that peak value. So I should be up 70% now on that bet.
I bought puts on the indexes then also. Those had closer to 3:1 leverage. I should have tripled my money.
Also, I knew back in Oct ’07 the markets would fall at least 35%, and I stated that then.
So having made those smart plays, all I had to do was simply hold those positions through to today. Then I would be UP OVER SEVENTY PERCENT net.
Each year I try to learn that lesson, but I never seem to remember to simply let smart bets make money.
