"Get use to disappointment." ~ Man in Black from The Princess Bride
I expect extreme volatility will be the norm for the rest of 2011. Also, I think the overall trend will be downward. For example, if I had kept the shorts that I closed on August 8, 2011, I would have made more money shorting.
I will try to take advantage of the volatility. My solution is to stay mostly in cash. I will buy on the dips and sell into rallies. Then, I will short during rallies and close my shorts during dips. I will keep positions small, less than 5% of our portfolio. That way if I'm wrong, losses will be capped.
I will follow this strategy until early 2012 or when the market stabilizes, which every comes first.
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This is not financial or investing advice. Please consult a professional advisor.
Copyright © 2011 Achievement Catalyst, LLC
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