Easy Change

 So in my previous post, I detailed that I had started to experiment with Options Trading. None of this is advice, but just a description of my experience and thinking. I think that this was an interesting part of my experience in the past year because I didn't previously understand the appeal of some of the more complicated parts of the financial system despite being interested in it for a very long time.  In the past few months, I've begun to take additional opportunities when I can with the shares that I own free and clear via covered calls. I've heard about this option more and I encourage people to read about it more if they are interested. However, this strategy works well for me. In my case, I own a large number of shares in my trading account of certain stocks or ETFs.  It is my intention to buy more if we ever see a market drop. That said, I certainly don't intend to sell. Even in a crazy, 80% style drop like the great depression. I'm holding to zero. It...

 In all the time that I have been investing in the stock market, both as an individual investor and as a future retiree, I've never invested in stock options. However, in the world of stimulus checks, these have become more and more popular and even more so in the world of meme stocks like Gamestop GME . What is an Option In my brokerage account I had to first ask for permission to trade options. Presumably, this was to ensure that I had enough money and I understood that there were risks that were not clearly understood to the average stock market investor. Indeed, in some cases your losses could be severe -- much more severe than in the case that you actually bought a stock. Put simply, a put option is a bet the price of a stock will go down. A call option is a bet the price will rise. On a stock that is at 100, you could buy a put at a strike price of 90. That means, you're betting that the price will drop below 90 dollars, and the put option gives you the right to sell the ...

 In recent weeks my circumstances have changed with my retirement account and the bulk of my retirement savings is in a self-directed rollover IRA. I am able now to look and invest more broadly. This has caused me to be more and more interested in mutual fund alternatives like ETFs.  ETFs are Exchange-Traded Funds which are a newer investment vehicle that are traded on the open market during the day with most mainstream brokerages and you're able to know the going price during the day instead of waiting for the close of market to have the mutual funds be priced. Also, whereas traditional mutual funds often have a fee in order to get in, many of the ETFs have no load and also very low expenses.  Impact to the Market I've followed Consuelo Mack WealthTrack for some time. This week's guest is a longtime expert in the industry and while he previously has favored mutual funds, in particular index funds, he now believes that their days are numbered.  Indeed, Morningstar ...

 I attended an interesting presentations given by IShares/Blackrock with the goal of showing how to use their ETF products to capitalize on investing themes for 2021: Gargi Pal Chaudhuri - Head of iShares Markets & Investments Strategy Dorothy Lariviere - iShares Product Consultant iShares (by BlackRock) - 2021 Outlook: New President, COVID-19, and Policy I found that this presentation was quite interesting. The presenters included two women which was a pleasure to see and they were quite intelligent and well-spoken. I don't advocate for any particular investment or forecast, but I thought that the summary was interesting and if you want to review the particular symbols they mention as ways to act on these themes, they are included at the end. US GDP Forecasts Above 6% for 2021 This presentation included a forecast that perhaps is not too shocking, but a positive report that GDP looks to be positive and a substantial number. The drivers for this include the ongoing fiscal and...

Are we recovering? "Optimists point to the rapid decline in the unemployment rate after the first wave of the pandemic—from nearly 15% in April to 6.7% in November— as a reason for a speedy recovery. Pessimists' go-to statistic is the high and rising rate of the long-term unemployed, those who have been out of work for more than six months. It has risen from 0.7% of the labour force in February to 2.5% today."  -From The Economist - Jan 2, 2021 (America's Jobs Market. Speed Limits) The article recounts the fact that many people who are long-term unemployed have indicated that they are only temporarily laid off, while history and shows that over time, many of these jobs may not come back. Many people have dropped off the rolls altogether and are no longer looking for work. According to Jason Furman and Wilson Powell III of Harvard University, the real unemployment rate is 8.5%.  Within the sectors of knowledge work, there has been a dramatic overnight shift to large nu...

 In the book A Random Walk Down Wall Street  author Burton Malkiel argues that the stock market is, as the title suggests, a random walk. In the book, which is cited and echoed by famous industry titans like Jack Bogle of Vanguard fame, it: 1. Makes little sense to think that you can beat the market. Indeed, on average you'll lose money when picking stocks. 2. In looking at when to invest and cash out of stocks, if you try to time the market you'll inevitably do worse.  This advice really stuck with me and I still believe this to be the case. But in the current environment, as many smart people do, I do find myself asking myself if it is different this time. Much of this is due to the performance of "broad market" indices. Diversification is the idea that by spreading your investment over many companies, you lower the volatility. You might have less upside, but you also have less downside risk. In the end, you're hoping the market as a whole does well, more than a...

  The Economist writes on January 16, 2021 that "the pandemic has ushered more robots into factories, warehouses and back offices." and that "they are here to stay." The article cites information surveyed from a variety of manufacturers and shows that the increase is marked for these firms' increase in digital consumer interaction and collaboration along with Artificial Intelligence and automation. So, in short, what does that mean for society and how will that impact investing into the future? Society continues to find new and innovative ways to make our lives better with technology. The amazon effect on retail has translated into the destruction of brick and mortar. Many people are happier with this setup. For advocates of online shopping, they are spending less time doing these errands and more time on hobbies, with family, or able to do other things that they feel are a better use of their time.  Amazon continues to forge ahead with its use of technology, u...