Here's how smart investors can protect their portfolios during market selloffs.
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00:00In times of uncertainty, narrow your book, have less positions, have a higher cash position.
00:05That's always important so that you can react when something happens, when an opportunity presents in a name that you trust or a name you have some conviction in.
00:15So basically, be flexible.
00:17Have target prices on everything you do.
00:19Do everything for a reason that you could explain to a child or to a novice.
00:24Don't take shots.
00:25No shot taking.
00:26If you do speculate, understand that it's speculation.
00:30I mean, what I have done of late because I've been trading more than investing is the zero days to expiration options.
00:38I don't really like the idea that those exist, but I'm taking advantage of the fact that they do exist in this market as not usually early in the day, but usually late in the day.
00:49I'll try to grab something for a song if I feel that the market may move in that direction and see if I can make some hay before the end of the day.
00:57And that's not really speculation.
00:59That's an educated guess based on what the market is doing.
01:03And it's done only with something I can lose.
01:07It's not gambling, so to say.
01:09It's risking what is losable.
01:11It's not betting the farm on anything.
01:13It's not gambling.