I agree about doing it as a philosophy throughout a career will likely not work out. I have personally done it twice. Once I lost a small amount of gain (maybe 5%) because I did not think it through well before acting and I ended up sweating for many months hoping to get a decent price to buy back in while fearing the market was going to go up big, and the second I saved a small amount of losses (maybe 8%). I feel this time is different because we are in a time of unprecedented upturn and I also have age in my favor unlike when I was 38 or 43. If I did it this time I would go in with conviction that I would not buy back ever unless the price is below where I sold while also gaining about 2% on very safe bonds. Sitting out would also provide the benefit of protecting my retirement savings and I am looking at 8.5 years to be eligible for full retirement. I don't really want to go through another 30 to 40% drop again like we did in the 2006-2008 era.

They are separate entities. We have separate financial resources and divide the expenses fairly equally for personal reasons.

Stock dividend are also 2% fwiw

bonds aren’t giving anything except they are less likely to lose money (safety) but you pay for that safety with lower returns.

If you had stocks and bonds say 70:30 you’d never have to worry because you’d have best if both which is what most people do especially as they get older.

If stocks drop you’ll have greater percentage in bonds which you can trade out for stocks (rebalance).

There is a lot more proven benefits to asset allocation with rebalancing than there is for timing the market.

It does work if I don't need to get back in but was keeping that as an option. The market could go up 20% in the next 12 months (unlikely but possible) and I would be fine missing out on that rise. If it did go back at least 5% below where I sold after the 20% rise sometime years from now then I would have done better than if I stayed in throughout. I also have the option to work longer than my full retirement date if I need to make more money later.

I am referring to a limited fund choice 401k type situation so individual stocks are not in this equation as an option. Individual stocks are for personal savings in this case which is a different issue for me. I also have limitations because of my job as to how much I can put in investment sectors. Believe me, I wish I could buy about triple the Apple stock I presently own.

For sure, there are brokers that don’t fully understand options. It’s inportant to understand options thoroughly before trading them

Most companies won’t let you trade your own options without approval, then naked options is another level.

Impossible to actually give specific advice without knowing the specifics of your situation. But in general sounds like you could be unnecessarily taking on to much risk in going to 100% bonds in your 401k account ....unless the majority of your savings is held in your unqualified accounts. It also sounds like you feel you are to heavy in stocks. Again I would develop an asset allocation and stick with it.

Epic fail. Hope no one followed your advice.

In my case, if and when I put the 401k type money in the bond fund, it is a government backed bond that cannot lose money. The only way it would lose is in the case of a collapse of the government. In that case everybody would lose anyway.

Government bonds can and do lose value. If you buy a bond yielding 2% and rates rise to 3%, you will have to sell your bond at a discount in order to induce a buyer to purchase yours over the new one at 3%. The only way you are guaranteed to not lose money is purchasing a bond at or below par and holding to maturity, which is rare.

A LOT of bond funds have lost money over the last year as interest rates have gone up.

It is kind of like a savings bond which also cannot lose value:

https://www.tspinvesting.com/g-fund/
"G Fund
The G Fund is by far the safest fund offered by the Thrift Savings Plan, hands down, it is truly a remarkable security. It’s one of the very few instances in the investment world where you literally cannot go wrong. This fund allows investors to earn interest rates similar to those of long-term U.S. Treasury Bonds, but without any risk or loss of their capital. The TSP G Fund is managed by the Federal Retirement Thrift Investment Board. The G Fund buys non marketable U.S. Treasury securities that are guaranteed by the U.S. Government. If you don’t remember anything else about the G Fund please remember that you cannot lose the money you invest with this fund and the interest is guaranteed by the U.S. Government."

That is a very specific investment, not available to the general public. While technically it cannot lose value through credit or market risk because of its special governmental status, it is still subject to inflation risk, and its long term performance relative to the stock market (or to even a moderate risk asset allocated portfolio) is abysmal. You are in effect losing money by owning it, but doing so safely in the process.

The bond losing value was not the risk I was talking about.

Yes

Yes. The only loss would be the interest value of the bond fund as compared to the inflation. An example, if I had $100,000 in and it got 2% interest I would end up with 102,000 after one year, but the inflation would devalue the buying power. That is also happening with middle class salaries over the last 15 years. Salaries have not been rising nearly as much as the inflation and cost of living.

That is not the only loss. There is the opportunity cost of not owning a moderate risk asset allocated portfolio as mentioned in Jcoble's post.

There is also the opportunity cost. A 60/40 asset allocated portfolio has never lost value over any 5 year period, and also averages almost a 7% annual return, historically. That fund averages about 2%. I'll take the added volatility for over 3x more return any day, even January 1, 2008. (See a chart of FRIAX for an example with that start date. Worst possible time to invest, yet it has still made about 3x the return of your bond fund over the last 10 years.)

Hah, I was typing too slow!

I don't count that because of other investments that are not in a 401k and are diversified. The only other safe option I have for this 401k type money is a market risk bond fund that usually does about 1.5 % better than the G fund. I would probably do about half G and half the market risk bond fund if I did it.
The problem with the market risk bond fund is that when the interest rates rise the fund goes down and we are headed toward and are due for higher interest rates for years it seems.

Here are my recent trades. Sorry for the delay.

8/30/18 - Sold 7 Netflix 380 Calls Sept 21 expiration for $9.88

9/5/18 - Bought back the 7 Netflix 380 Calls for $2.35

9/5/18 - Sold 7 Netflix 315 Puts Oct 19 expiration for $10.06

8/30/18 - Bought 1,150 shares of JC Penny (JCP) for $1.73

Why I quickly covered the calls: I was up 76% in less than a week. Gains like that must be locked in every single time.

Why I sold the puts: Stock was way oversold yesterday. I sold the puts when the stock was around $343. I have almost 30 points of cushion, plus the premium I took in.

To review my Netflix. I purchased at $368. With the 2 different times i sold calls on it, I've already locked in $17 of premium, which in essence, lowered my cost basis. With the puts I just sold, that's an additional $10 in premium I have taken in...chances are, I won't let it expire. 99.9% of the time, I always lock in my gains and remove the liability.

As for JC Penny, I will be building a position in this. Looks like they are trying their best to rediscover their customer base. Just look at what some of CEO's are saying about the economy. As a business owner, I can definitely say this is the best economy I've ever seen. IMO, I think this Christmas season will be phenomenal for retailers.

What I like about JC Penny. It's $1.75...that's the most my downside can be. Any small turnaround in the company, and this stock could possibly see $5. That's a tremendous rate of return. Compare it to Walmart, which absolutely is a better run company, but the stock is around $100. Makes it harder to build a big position, plus, I would need Walmart to run up to $250 to get the same pop I could get in JC Penny.

https://eresearch.fidelity.com/eresearch/evaluate/news/basicNewsStory.jhtml?symbols=BABA&pageno=&storyid=201809042006RTRSNEWSCOMBINED_L3N1VQ3OG_1&provider=RTRSNEWS&product=COMBINED&;

200 bil of China tariffs could hit this week not good

I’m learning a lot from your trades.

One thing is not to be greedy and take a quick profit rather than letting the positions expire months later.

That link took me to a Fidelity article titled "JD.com CEO was arrested on allegation of rape -police report", but I didn't see much about tariffs.

Two separate post two separate issues

I like that he posts them when he makes them. Much braver than I'll ever be.

Sold 10 Amazon 1,820 puts September 21st for $11.94

10 Amzn puts

I’ve been selling a lot of Amazon puts but not at these levels.

12 trading days. Taking my chances it doesn’t drop over $130.

Up over 4 points on the Amazon options that I sold around 1:30pm today....

Just bought 3,850 shares of JC Penny (JCP) @ $1.73

This brings my position up to 5,000 shares.

I bought some Cronos, a marijuana company, as a gamble about two weeks ago. It has been interesting watching it yo-yo.

cronos (resized).JPG

Catching a falling knife? Why JCP?

Im up 101% on APH.

1 - Downside is $1.73

2 - Surging economy...Christmas this year will be gangbusters for retailers.

3 - They are refocusing on their core customer.

4 - JC Penny represents less than 1% of my trading account.

How low can GE possibility go???

Along with JCP and Sears:

https://www.macroaxis.com/invest/ratio/GE--Probability-Of-Bankruptcy

That's how to do trades not investments yet keep things interesting

railroad stocks is all you need to know!

I bought some weed stocks (Canopy Growth) myself on a lark back in April at $24, figuring the legalization was probably going to skyrocket it come July. My friends laughed and others thought the run up from $10 was all it had to give.

Boom goes the dynamite

Sold 7 Netflix Calls October 19th $395 strike price for $10.15

Sold 5 Amazon November $1,820 puts for $55.14.

7EB54C66-D841-4C31-AC90-86924084B9DD (resized).jpeg

I wanted to do 10, but advisor talked me down to 5.

Trade made yesterday??

Today. Would’ve been a lot more if I did it yesterday.

I got in a little late....I am long on CGC. Pot stocks are going crazy.

My big winner for 2018 is SFIX, My wife and mother in-law love this company . I have done it a few times and like the service too. Oct 1 is earnings, This will be the rise or fall of this company.

amazon puts are great..I keep selling a week out.
wish I woulda sold the puts yesterday though...little bit scary how much it moves in day. then again thats why its such a premium

I sincerely hope this ridiculousness does not not end up affecting our friends north of the US:

https://www.marketwatch.com/story/canadian-marijuana-investors-could-face-lifetime-bans-from-entering-us-2018-09-13

Just covered my Amazon $1,820 puts that expire at the end of this week for $1.78.

85% gain in 12 days.