Anyone else buy any cool investments on Monday when the Dow had the worst single day in History? I maxed out our IRA’s, and bought my admiral VTSAX shares back after selling them to buy my first investment property in May. Here’s my story on how I made the decision to buy: https://www.wealthwelldone.com/bought-stock-worst-day-dow-jones-history/ It’s a good opportunity to learn new ideas of what other people are doing.
I’m a time in > timing, so no, nothing out of the usual.
That’s a GREAT way to do it. If I was in a company work retirement plan that’s probably how I would do it, but I am self-employed so I generally just save the whole year and then make a decision on how I want to invest at the end of the year depending on how my tax situation unfolds.
It was tempting, but I did not pull the trigger.
I will buy tomorrow as part of my biweekly DCA schedule.
Sounds good. I was getting cash-heavy so it was an easy excuse to jump in for me. I am self-employed, which means I don’t have steady paychecks, so the automatic payments don’t work well for me as my paychecks can have pretty big swings. Saving everything and then finding good opportunities to buy-in when I am cash heavy works the best for me, and I think I also like the excitement of looking for a good time to jump in too.
You picked a good day to buy.
Buying on a day when there is a -7% correction is a good opportunity to put some of your cash to work.
I actually bought some NWL not long before the crash with my “fun money”. Have to admit I was sweating a bit with it going down every day, but it already recovered and then some.
I wanted to purchase a decent chunk of XIV when the VIX hit 40. XIV is (was!) the inverse volatility tracker that lets you earn money as volatility declines. You could buy it anytime the VIX exceeded 25 and keep holding it until markets normalize again - then sell. In the past 5 years there were plenty of windows of opportunity on this, some of which I could take advantage of.
However, I soon learnt the XIV unwinding procedure was most likely the cause for the whole sell-off (1.9bn market value of XIV and more than 225bn worth of stock behind). Now taking time to study more what other WMD (weapons of mass destructions) could be out there. Apparently the volatility tracking product space has assets north of 2 trillion behind it. If the SEC where to forbid and restrict the size of these products, many other product service providers would have to unload their holdings in a short period of time. So far the only other inverse volatility tracker I could find is the EXIV (issued by UBS), but given the high regulatory shutdown risk, I’m staying out of it for now.
Writing options would be something worth considering now. Vols haven’t been that juicy in a long time! But I stay on hold for now.
Here some related articles for interested readers:
Some made huge profits:
While others lost big time (but hey, who the Fxxx keeps “hodling” on to inverse vol trackers with VIX below 10 anyways…):
So they pulled the plugs:
This has to be cleaned-up now: 2 Trillion!!!
The whole thing reminded me of this scene, you kind of wonder what else is out there:
Anyone else out there following these developments? Any add-ons or deviating views? Would love to see how others in the Rockstar Forum observed these developments. What’s your take on what has happened?
For me the “sell-off”/ plunge/ or stock market correction is only over once it got a name! So far it hasn’t got a name. Would somebody please name it already ;o)
Really great stuff. I’ll read into this. I heard versions of this on Yahoo Finance, that many of the computer algorithms that run modern trading sort of just went weird for a day or two. Nobody knows for sure yet, but if this is true, it was a good time to take advantage of a computational mistake. Interesting idea to look for other errors/flaws that may be hiding out there, and try to profit from them.
Yep. I bought back some shares that I had previously sold at a higher price, bought some VTI, and put $20k into two stocks that had dropped to what I considered a bargain price.
I bought 6 shares of VTI and picked up a couple shares of AAPL for my dividend portfolio. I am in it for the long haul though. I have had a small stash of cash waiting for this correction.
I actually wrote an updated post to my Tuesday post titled, “$#%$#@#$ Timing the Stock Market!” It even includes a video of Arnold fighting the Predator in the movie Predator as that’s what trying to time the stock market can feel like sometimes. Haha
I’m a buy and hold investor myself, but I like to have a tactical overlay, this might be the most interesting stuff you could have learned from the last week: SVXY is my new tool going forward.
Here, two success stories of hedge funds who got it right this time and how they did it. You don’t need a lot of cash-out to buy yourself into this trade. There are tradable options on the SVXY! Let’s assume you have a $1mio portfolio producing 4% dividends a year, if you tactically reallocate a tiny part of these holdings into the right structures, you can have a much smoother ride.
For traders at a little-known Denver hedge fund who saw it coming, it was the score of a lifetime – a $17.5 million payday on a $200,000 bet. “People were laughing at us, saying this could never happen, this should never happen,” Justin Borus, the 41-year-old founder and manager at Denver-based Ibex Investors, said in an interview. “We saw people pricing this as a 1-in-5,000 event.”
Cole’s Artemis Vega fund, which he started with $1m and has now attracted nearly $350m of investors’ cash, is designed to “generate opportunity from chaos” – and he believes there is far more chaos coming.
His bets paid off this week as global stock markets collapsed, rallied and then fell again. Artemis is designed to benefit from such periods of turmoil and volatility. Market volatility, measured by the Chicago Board Options Exchange (CBOE) Volatility index known as Vix or the “fear index”, spiked 84% on Monday – the biggest one-day increase since the 1990s. It hit 50 on Tuesday and was around 30 on Friday, far higher than it has been for the last two years when it only poked above 15 a couple of times.
“It’s been a good week,” Cole said in a interview with the Guardian. “The explosion in the Vix and the rise in volatility is something we have been predicting, and waiting for, for a long time. We were well prepared to benefit from it.”
Hey, that is really great!
I made my monthly purchase last Friday. Tax loss harvested that lot this Thursday. Trying to make a little lemonade from this lemon of a week.
I bought Southern Company mid day on Friday. Not overly cool, but a hot 5.3% dividend yield. Tom