The market is falling!

August 16, 2007

The market is crumbling right now. For the year-to-date (Jan-Aug), the DOW and SP500 are at 3% and 0% respectively. For the year (Aug07-Aug08) they’re still up approximately 13% and 8% respectively. So what’s the big deal? At the peak in mid-July both were up over 20% for the year. That’s an insane rise in the market and it had to come down anyway. I was itching to buy some out-of-the-money put options to protect against a sharp downward move, but my friend (who makes tons of money for her alleged knowledge of derivatives) couldn’t understand my simple Options101 strategy. I got nervous because of my spineless reverence for expertise (if she wasn’t sure, then I better not do it). Too bad. I could have protected most of my profits at its peak in July. Anyway, I’ll slowly drop some more money into the market to bring my average purchase price down (dollar cost averaging).

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