As mentioned last Friday, the correction was not likely over. Today was rather devastating, but looking at the big picture, not so bad considering SDS was there to bear hedge the portfolio. The result was that on a day when the Wilshire 5000 lost 2%, our portfolio lost "only" 0.95%. Painful, to be sure, but much less so than for those who did not prepare for a storm that you could see coming.
The financial press is getting almost hysterical about its claims that the subprime meltdown does not affect the overall economy much. Fair enough, but tell that to the financial sector, which comprises a very large percentage of the S&P 500 (and of this portfolio as well) and is getting unmercilessly hammered by the fallout.
Anyway, I'll reiterate that when things start settling down, it'll be time for snatching up shares at bargain prices, and the beauty of hedging a portfolio is that it provides you cash to help build it back up without excessive pain.
Until then, we will continue to grin and 'bear' it...
Not a 'dividend capture' strategy, but a conservative long term approach to accumulating wealth by selection of investments with rising dividends. DISCLAIMER: The information herein is not investment advice, and is solely the opinion of the blogger. This blogger takes no pity upon the fool who acts solely upon this information without performing due diligence. An Internet blog should never be the basis for making investment decisions.
About Me
- Lewis P. Cornell
- An investor since the mid 1980s, who studied investment management for his business degree. Genealogist and compiler of "Cornell and Allied Families of the Southern United States"
