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Another Down Day for the Market

March 5th, 2007 at 04:55 am

Australian and the Asian Markets were all down again today - it looks like this may end up being a "real" correction of 10-15% rather than just a "blip" that we've had several times before during the past three years of bull run. It will be interesting to see what the US bloggers post tomorrow if the US Market also drops a couple of percent tonight - there were already some "newbie" stock investors posting comments about "crashes" or "corrections" after just dropping 3%!

If the market levels out after a 10-15% correction I may have to seriously consider whether to take a profit on my ASX200 Index Put Options, and hope the bull market resumes for the remainder of the year. Or whether to hold on to them, and possibly buy some additional Put Option Contracts so that I'm fully covered against a possible bear market (30%-50% drop?).

So far my Australian Stock Portfolio is down around $40,000 from the peak - it will be interesting to plot my stock portfolio "losses" vs. the "gains" on my Option Contracts that Comsec emails to me each day (based on the previous days closing "market price" for the Options Contract). In theory the 3 contracts should offset something like 25%-30% of my portfolio losses.

Enough Wealth

3 Responses to “Another Down Day for the Market”

  1. jIM_Ohio Says:

    The US market, prior to Tuesday, was in it's longest run ever without a 2% correction.

    It will be choppy, and I think defensive investing will pay off this year. My Roth IRA barely dropped last week, and I am 87% stock and 13% foreign bond.

  2. zetta Says:

    There's a currently a thread about the pros and cons of The Little Book that Beats the Market. Since you're experimenting with it, it would be really interesting to hear your take on it. http://www.savingadvice.com/forums/investing-banking/26421-l...

  3. jIM_Ohio Says:

    It's a blip... whether it's a big blip or little one depends... ask me when it's over and I'll tell you what you want to hear today. LOL

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