10 Warning Signs of a Market Crash in 2015

[SlumTodd_Millionaire]

I'm willing to bet that most people on here talking about options and futures trading have a (probably multiple) long term portfolio, and most likely invest that money in index funds.

I would hope so, because that's how most people should invest. I don't have my money in index funds, though, because I spend the time to do the fundamentals research. Few people are willing to devote the time to even learn how, though, much less devote the time on an ongoing basis to research their investments. My accounts mirror what you'd see from every Graham/Dodd disciple: a focused group of undervalued, high quality businesses, with most paying dividends. Been beating the market for 15 years. Like Buffett said in "The Super-investors of Graham-and-Doddville," no matter how many decades go by with hard core value investors beating the market and technicians and traders trailing the market, there will still be people gullible enough to think that they can be the hare that finally beats the tortoise.

I guess I'm confused here. Without going back and reading the other pages, are @fly22 and @dasleben suggesting to invest a nest egg in nothing but options and futures? I thought they were just saying it is another method to hedge, or possible additional cash flow (that can then be reinvested in the long term portfolio).

It doesn't matter whether you devote one dollar or one million dollars to such insanity. The result is still depressed returns for your overall portfolio. The bigger the proportion devoted to it, the more depressed the returns.

 

[dasleben]

I'm willing to bet that most people on here talking about options and futures trading have a (probably multiple) long term portfolio, and most likely invest that money in index funds. I don't know for sure though. I guess I'm confused here. Without going back and reading the other pages, are @fly22 and @dasleben suggesting to invest a nest egg in nothing but options and futures? I thought they were just saying it is another method to hedge, or possible additional cash flow (that can then be reinvested in the long term portfolio).

Just got your PM, but I'll reply here first.

For a long-term portfolio, the smartest thing to do is invest in an index fund. For me, I simply invest my 401k in an S&P500 tracking fund, which it seems like you do as well. It's boring and not at all groundbreaking (discussed pretty heavily in "A Random Walk Down Wall Street"), but it works.

My point with options and futures is that, in the right hands, significant profits can be made in most timeframes. In fact, do a Google search on the "Turtles." Link: http://www.investopedia.com/articles/trading/08/turtle-trading.asp. As a group, they made about $175M profit over 5 years trading commodity futures. The original Turtle method is out in the open and really doesn't work anymore (not without significant adjustments to the original rules), but it was an excellent proof of concept. And trust me, there are guys out there right now in the futures and FX markets absolutely killing it. Profits well beyond what you can get trading single equities.

Most guys I know trading within an IRA are doing covered calls, and that works for them fine. I've traded a lot in option spreads, but there are enough moving parts in an option trade that you simply shouldn't put one on because you can; the market environment needs to be specific to the type of trade you're putting on to provide the edge. You also need to negotiate the spread aggressively on option trades, particularly SPX.

Todd is no doubt going to disagree, but I swear he's turning into the private pilot on a.net arguing with airline pilots about how to fly jets.

 

[SlumTodd_Millionaire]

Todd is no doubt going to disagree, but I swear he's turning into the private pilot on a.net arguing with airline pilots about how to fly jets.

 

[pnwchief22]

My Index fund added another percent this session, fast? recovery from dark days at the end of 1987. It has been an amazing run of risk and reward, now I think an annuity is in order.

 

[SlumTodd_Millionaire]

Annuity? I swear you people are trying to make my head explode.

 

[pnwchief22]

I worked in State and Local Government, so I may not be living in the market as others... I believe their plan is viable; new state law proposed this year is likely to reduce the options for new hires and seemingly could follow California's example for pension liabilities decided in the courts.

Total Allocation Portfolio (TAP) Annuity that is administered by the state of Washington + you must use funds that are in the Washington state investment board.......

Excedrin might help