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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: Portfolio Strategy in a Global Down Draft||Date: 9/14/2008 9:39 PM|
|Author: TheRTTrader||Number: 251865 of 512943|
... The only way to win is to not play and that option doesn't exist.
Unless you are a mutual fund, the option to stand aside does exist, at least temporarily. I traded the crash of 87 (not stocks or stock index futures) and what happened is that bonds soared (flight to safety) and commodities got crushed too - all of them, because of general panic and mostly forced margin call liquidation. Volatility was extremely high as you can imagine and none of the above, nor stock prices were permanent "trends." So, why get hurt in the crossfire?
Don't want to sell at the "wrong" time, go market neutral - hedge.
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