Volatility Delivers Crushing Blow!

Ouch. The surprise volatility in the market last week delivered a crushing blow to our options portfolio. Our options portfolio had been trading significantly above the market return, and after one short week has fallen behind. Options returns are by nature far more volatile than stock movements. In that sense, the risk is higher, but so are the rewards. We purposely set limits on our overall options allocation to no more than 20% of our investment portfolio. We know the risk and returns for trading options is higher, so we manage our overall risk by placing limits on what is allocated to speculative investments. We also know that our options portfolio will bounce back sharply when the market recovers from this short term panic. Volatility will test patience and conviction, but now is not the time to bail on long positions that still have time to run. We expect our options portfolio to bounce back sharply once market fears begin to subside.

Portfolio Details Available Online At:
http://www.marketbeatingstocks.com/