eatingmywords
Dryer sheet wannabe
- Joined
- May 2, 2010
- Messages
- 23
Hi all. I recently read 'buy and hedge' and am wondering if anyone has successfully implemented their strategy?
The premise is to purchase ETF options rather than the ETFs and maintain a leverage ratio as close to 1.0 as possible. The idea is that instead of 100% of your portfolio committed to the market, you purchase the options, which given the 100x leverage amounts to about 10-15% of your capital committed. The other 80% or so is in cash or other conservative assets (bonds, treasuries, etc).
I have a pretty high profitability rate selling options, but lower success rate buying options (mostly due to short term bets), so there's a little hesitancy. I'm an engineer rather than a finance person, so I don't have the luxury of experimenting with other people's money =) Any thoughts on using an asset allocation with long term options v. traditional vanguard etfs?
Book Review: 'Buy And Hedge: The 5 Iron Rules For Investing Over The Long Term' - Seeking Alpha
The premise is to purchase ETF options rather than the ETFs and maintain a leverage ratio as close to 1.0 as possible. The idea is that instead of 100% of your portfolio committed to the market, you purchase the options, which given the 100x leverage amounts to about 10-15% of your capital committed. The other 80% or so is in cash or other conservative assets (bonds, treasuries, etc).
I have a pretty high profitability rate selling options, but lower success rate buying options (mostly due to short term bets), so there's a little hesitancy. I'm an engineer rather than a finance person, so I don't have the luxury of experimenting with other people's money =) Any thoughts on using an asset allocation with long term options v. traditional vanguard etfs?
Book Review: 'Buy And Hedge: The 5 Iron Rules For Investing Over The Long Term' - Seeking Alpha