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Investing is fun in a bull market. The prices just keep going up and up. It’s great! And you keep making money. Thing is, along comes a bear market, and it wants to take back all that money.

And you don’t really want to give it back. I mean after all, what’s the point of investing if not to make money.

Now all the “really smart” people will tell you to just sit tight. It will all be okay. Here have some candy and drink some Kool-Aid.

Yeah, yeah. Wouldn’t the prudent person actually active protect risk?

Wouldn’t the prudent person assess the risk and take action to negate it as much as possible?

Aren’t you a prudent person?

Okay, so that’s settled. Now, what to do about it?

Well, I’d recommend buying some puts on some of your stocks. Yes, that’s an added expense, but you’re buying insurance against a decline of the stock market.

And if the cost really bothers you, you could sell some calls as well to offset the cost. Don’t worry about being called out of your stocks. First, you can sell out-of-the-money calls to minimize that risk, and furthermore, if you are called out, just buy back in.

You made money by being called out, so don’t worry about it. Yes, there is a slight increase in transaction costs because of all of this.

So, I ask you this question. Would you rather have full market risk and risk everything, or pay a bit more and be protected and secure your investments?

Do you want to learn more about how I do it? I have just recorded a 25 minute CD called “How To Pick Winning Stocks - The Secret Formula”

Request your free copy here: Click here for your free CD

Article Author :Nathan_Pennington

Tags: Investing, insurance, investments, stocks, irs

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Tags: insurance, Investing, investments, irs, stocks, trad