Your Investing Plan for the Next 3 Months
Historically, stock market volume has slowed down from Memorial Day until Labor Day. (Picture Wall Street traders lounging on the beach in the Hamptons, and you’ll know why.) Hence the old Wall Street adage: “Sell in May and go away.” But this stereotype may be a thing of the past.
Last summer, volume on the New York Stock Exchange was higher in June, July, and August than it was in the three months prior or the three months after. The credit crisis was just coming to light, spurring some of that additional activity, but not all of it. Over the last few summers, there was plenty of movement and money to be made. There’s no reason to believe this summer will be any different.
But before you jump into summer trading with both feet, be aware. Most of the summer movement has been on the downside of the market. Fortunately, there is just as much opportunity to profit from the downside as there is with the upside. One easy way to make money on a downside move would be to buy an inverse index ETF. You can buy one on the Dow (DXD), the S&P (SDS), or the Nasdaq (QID).
So don’t just pack away your trading like you do your winter clothes. Learn to invest in the downside by using some different tools to make money.
Rick Pendergraft
Inspired by his high school economics teacher, Rick Pendergraft fell in love with the markets at an early age. He entered his first investing competition at 17, and opened his first brokerage account before he finished college. At the age of 23, on the third options trade he had ever placed, Rick turned $1,800 into $22,000 in less than a week, when the company he bought became the target of a takeover. He admits it was a stroke of luck, but it was a memorable education as to the leverage that options can provide. After a ten year career in banking, Rick decided to pursue trading full-time. To get his foot in the door, he started out in the sales department at Schaeffer's Investment Research. It was not long before his talent was recognized and he was invited to apprentice under Bernie Schaeffer, one of the top options traders in the world. Rick thrived in his new position and twice received the award for "Top Trader."Rick has developed a loyal following of readers who are grateful for his timely warnings and profitable advice. He is widely recognized as a market expert and has been frequently quoted by Reuters, BusinessWeek, Forbes, USA Today, the New York Times, and the Washington Post. Rick's primary focus is on identifying short and intermediate term rising and falling trends in the major market sectors. His analysis is based on technical factors along with indicators of market sentimentRick lives near Delray Beach, FL with his wife and three children.