Tuesday, October 20, 2020

Hedging My Portfolio or A Bull On the Rampage?

 There are lots of things that tell me to think of hedging my portfolio.

Statue of a bronze bull on Wall Street

Death, viruses, lock downs and business collapses. Damn this year has been tough and you have to say not over yet.

Back in March, one of my portfolios lost over forty percent of it's value. My ROTH IRA luckily a little more defensive lost only eight percent. Thank goodness for those Utillities which bolstered a down facing couple of months.

I do love to buy though.  As well as reinvesting dividends in most of my companies I like to invest a couple of hundred dollars of "new money" each month. By the beginning of August I was generally fluctuating around my break even point for the year. 

Now, in October despite buying a couple of Apple stocks at their high point just before the four for one split I am now up twenty0nine percent in that big loser portfolio I mentioned earlier. My ROTH IRA is now up  seven percent on the year, up about fifteen percent from the low of March 23rd.

My ROTH IRA is pretty low volatile.

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 That brings me to my pet peeve for the year. The Youtube investors who vlog about finance and talk about Invesco S&P High Dividend Low Volatility stock (SPHD)  Ok before Mach it was trading in the high $40's and fell to below $30.  I own the stock too. I lost in the fall. But overall it did not lose as much as it could have and since April it has increased in value to the low $30's and has paid its dividend every month too.

So the Youtubers constantly go on about how the stock is not rising quickly. Er. People! It is doing what it says in the description. It is "LOW VOLATILITY" meaning it should not rise or fall quickly. Exactly what it is doing. It did not fall by a lot nor is it recovering quickly.

Read the F*****g description people, know what you are investing in.

I guess they are getting grief from those people who follow them blindly and bought SPHD back in the days of $40 per share and a nice tasty monthly yield. Though the monthly yield is still good it is tough to stomach the loses in the stocks value and a slow recovery. That's what you get with low volatility. Like my ROTH IRA no big gains, but no big losses either, slow and boring when it needs to be.

I am still a bull though.

Maybe not a raging bull. I am dabbling adding to positions that I already hold. A share here and there. I have put some cash into  covered call etf's. QYLD, and QYLG both buy and sell in the NASDAQ market. QYLG looks to save 50% of it's stock for growth of the portfolio too. I also bought stock in XYLD and XYLG which use the same strategies to invest in the S&P 500. Along with those I added a few RYLD which sells covered calls of Russel 2000 index stock as supplied by Vanguard.

I think 2021 will be pretty volatile. The virus will make it's moves and people will react and over react as usual. But I believe that things will get better before the turn of the year into 2022.

I cannot see a better place to be than in the stock market right now.  Hopefully some of my dividends should start to recover. We will definitely see global markets rise. Things will be better by Christmas. 

Where have we heard that before? 

Ah. Yes but I mean Christmas 2021. For certain, it's a promise. For what that's worth.

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