So I must confess this market has me a bit nervous. My main outlet for financial nerves is my “play money” (aka mad money) IRA account. Here are my recent plays:
- Buying an SPY call to close my covered call. (realizing ~$300 gain on the call)
- Selling 100 shares of SPY (about $1100 loss realized over about 1 year, offset by about $700 in call gains and dividends)
- Buying 2 OCT 123 SPY puts yesterday (~$490 profit on paper in a day and a half).
So far I am happy with these moves. It frees up cash for future buys and gives me the feeling of security of cash (in a money market). More importantly it makes feel active rather than feeling passive. This is helpful as part of me wants to sell sell sell! shares in my broader portfolio.
For me getting out of shares (selling) is emotionally easier than getting back in. Thus, staying in is important. I must admit it is feeling harder to resist a bit of selling. I am certainly discouraged by the lack of gains in the last 10 years in the stock market.
Which gets me to real estate. My home has been a pretty solid investment. It has appreciated about 4-5% annually inclusive of the recent slight housing downturn. This is not bad considering :1) it is a leveraged investment, 2) tax-deductible interest payments, and 3) I enjoy my house and my neighborhood. So I take some solace in the fact that while stocks have been mediocre, my other investments (house, bonds, money market, options) have provided decent (if not exactly spectacular) returns.