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Posts Tagged ‘Investing strategy’

Dow 12,000…Now What? Part II

Friday, June 10th, 2011

Yes… the image you see is what Dow 12,000 looks like coming from the other (less desirable) direction. Today marks the sixth time the Dow Jones Industrial Average has crossed the 12,000 level since the first time on October 19th 2006 (no relation to Black Monday, October 19th 1987).     We felt this was an opportune time to revisit our post from January 27 of this year entitled Dow 12,000…Now What?’ and to share our sentiments on the current environment for the economy and the financial markets. 

The market has declined now for six straight weeks and the decline accelerated recently when a trifecta of negative indicators came in worse than expected.  These areas of weakness included housing, employment and consumer confidence.  As of this writing, the tech heavy NASDAQ composite has slipped into negative territory for the year as the technology, materials and financial sectors have declined the most over the last month.  Utilities, healthcare and consumer staples have held up best over the last several weeks.  (more…)

Where is the silver lining?

Tuesday, May 17th, 2011

-By Tim Dyer

One year ago today, the popular commodity Silver (as measured by the index fund: SLV) was exchanging hands at $18.50 a share. Fast forward to today and you will see those same shares of SLV trading at a little over $33.  That is a pretty healthy gain of 78% vs the 20% return of domestic stocks over the same period.  What is even more eye popping is not only where SLV sits currently but where it has been. The current price is down 30% from the recent high of  $48 that was achieved on April 28th. The move from $18.50 to $48 was a move of over 150% in less that a year!  Volume on this index traded over 180 million shares at the high as the Federal Reserve issued a statement that interest rates were destined to stay low in the near term. Is that a lot you ask? YES! The most widely traded index is the SPY (S&P500) which had volume of 120 million. SLV had traded 60 million more shares that the SPY index traded for the day! 60 million times $48 a shares is a LOT of money to change hands.

Silver has had a historic run, the chart has gone parabolic ( Wall Street jargon for “looks like a hockey stick curve”).  It is not surprising that investors have been scratching their heads wondering if this is a pullback or the start of a new downtrend.  The risk level is now elevated and investors should use caution if they want to allocate money to this asset.

The silver lining here: “The trend is your friend, till the bend at the end.” The move from here, up or down,  is not for the faint of hearted and protecting profits may result in lost opportunity cost but not loss of capital.

Breast Cancer Awareness Portfolio

Monday, April 4th, 2011

 

Investors are looking for more ways to give back to the community and to allocate resources to things that matter most to them and their families.  Decision Investments is pleased to introduce the Breast Cancer Awareness (BCA) Portfolio. The investment strategy is designed to make a meaningful contribution to overall cancer research and raise tens of thousands of dollars for breast cancer advocacy organizations. See more here.

Option Series #1 Covered Calls

Friday, October 1st, 2010

Ohio State football  coach Woody Hayes  is one of a few who is accredited with saying that when you put the ball in the air, three things can happen and  two of them are bad.  In the Equity markets three things can happen when you purchase a stock. It can go up, down or sideways.  Only one of these outcomes is good.  In contrast, with a Covered Call, the same three things can happen to the underlying stock yet two are good.

A covered call is an investment strategy that may help investors manage risk,  enhance returns and simply make money during sideways markets.  A covered call is one of the most conservative ways to participate in the equity (stock) market and this strategy actually entails less risk than simply being long (owning) a stock outright.

Covered Call

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