The fun portfolio, volatility, derivatives


With the recent market volatility, how are you trading with the derivative market? Are you still trading the same number of contracts every Monday morning now as you were when the volatility was much less sporadic?  Thank you

Monday Morning Millionaire Program Answer:

You are right in doing your options selling in your fun portfolio and not in your core portfolio. Most of the time selling derivatives is a winning strategy, but not all the time. Over the course of a decade, investors are more likely to come out ahead by maintaining their asset allocation between an exchange-traded fund which mirrors the S&P 500 (e.g.,  SPY, VOO, IVV) and cash. Mine is 50/50. Remember,  only sell, never buy or trade derivatives. Review Chapter 8 of Monday Morning Millionaire.

Increased volatility increases premium values; it can be more interesting. So yes, I sell the same number of contracts when the markets are more volatile.

Please note that the Monday Morning Millionaire Program contains opinions only. It does not provide any investment advice or endorsements.





Dr. Milan Somborac

The Monday Morning Millionaire Program supports do-it-yourself (DIY) investors which I have been for over 50 years. About my team and me

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