The Double Dip Recession / Stock Market Crash 2011 Part 2

Posted on 09. Aug, 2011 by in Focused Investing

If you bothered to listen to the doom and gloom of the news and listening to your friends and family about how bad the stock market is and how times are tough then you would be thinking of cutting your wrists by now.

Sit back and relax with a big smile on your face because now is the time to buy. In other words do the opposite of everyone around you i.e. buy while others are fearful!

There is absolutely no point attempting to pick the bottom of the XJO / ALL ordinaries is it 3500 points or the major support at 3200 points who knows and all you need to know is who really cares. All you really need to know is that now good value buying can be seen and provided you protect your investments with put option contracts you will be protected from the downside.

Here’s an example:

• Buy 100 Shares of XYZ @ $19.00

• Buy 1 PUT option with a 12 month expiry approximate costs $2.50 x 100 = $250 (1 put will protect 100 shares)

You will now receive the dividend payments and regardless be able to sell your stock for what you paid for it. This is similar to buying insurance on your depreciating car.

Anyhow going on the current market volatility you are witnessing some very good buying opportunities. For peace of mind buy PUT options to protect your share investments.

Another tip – if you have stocks in your portfolio that you are unable to buy options over then I suggest buying indexed options. If you want to know more about indexed options then send me an email and I will do a video on where, how, what and everything else in between to help you.

Oh and before I go this may be a crazy idea or a good idea send me an email if you would like me to setup a date and time for a Q&A session more than happy to help you.

Chat soon