The stock market is tanking. Again. How do you use this to your advantage? I think there’s something to be had for having a strategy that works in up, down and flat markets.
I have heard one such strategy, and like all things you read about on the internet, it makes sense. This doesn’t necessarily translate into being true, or valid, only into appearing to make sense. Here’s the trick: choose paired stocks in the same sector, one that outperforms and one that underperforms. Then hold opposite positions in each – buy and short one. Then some magic happens and the market goes up or down, and you sell one position, and bingo – you make money. I forget the details. Buy low, sell high I think.
The challenge with this as get rich quick scheme is that you need a lot of something to make something else. So screw that. From there you go to something a little more leveraged and exciting. And that’s when my pal turned me onto ETFs and volatility. It took me back to calculus – the rate of change of something, the future rate of change. It’s still a mystery to me, though I really want to put up a picture of a tank right now, so here’s one I found earlier.