We are currently in a bull market. It has been a bull market for quite some time. Looking back, bull markets tend to eventually end. When this happens, by what trigger, and what course it will take, are all unclear (at least to me).
My question to you, fellow presumed investors, is how do you intend to prepare for an eventual bear market?
Do you intend to:
A) Continuously invest now and throughout any bear market.
B) Short the market when you think it will turn down/after it has started to turn down.
C) Increase the proportion of your savings that you hold cash (like Warren Buffett, although he has size constraints that individual investors do not), or alternatively in bonds?
D) Move investments into less cyclically affected shares or markets.
E) Do nothing as "this time it's different (TM)", and bear markets will never happen.
Or something else?
Please share what you intend to do, and whether you intend to do so before a bear market or if you think you will act after it begins? Also feel free to share what approach you took during the last bear market, and how that worked out.
Disclaimer: I am not saying I want a bear market to happen, I do not wish to upset anyone and I am not trying to influence anyone's financial decisions. I just want to have a nice pleasant discussion on the matter and for people to share their strategies.
for reasons not entirely clear to me it seems to act inversely to the S&P
That part seems fairly simple:- when people feel confident they are prepared to pay up. It also acts inversely to the Nasdaq, Transports, Small Cap and other indices.
Care, however, is needed with the contango (or backwardation). Every three or six months UVXY is consolidated, your 100 units become 10 or similar. It appears to have no expiry date but the underlying futures contracts do. (Do not challenge me on these explanations, they are approximate).
I have been running a core position on UVXY for more than a year for several reasons. One of them is that when it flies you have no time to 'pick some up'. Volatile days see huge price changes measured in minutes. I have staggered limit orders. It worked well last year but volatility has been so low this year the core position is significantly down.
As you say it is time to add and if there is any volatility before the next consolidation there will be a profit on the new portion.
The last consolidation was July 20 and appears to have been 1 for 3. Spare me further detailed research, please.
The consolidated rump, however, will continue to show a loss unless the sky falls on us.
.JPG)
