OT: TVIX update I originally purchased 105 shar
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Posted On: 03/23/2020 7:36:21 AM
OT: TVIX update
I originally purchased 105 shares. I intended to buy at least 100 more, but COVID-19 hit and the price exploded. I still have 5 shares with total profit of about $3K.
As a hedge (to date) I have been able to limit losses in the portfolio to 10%. It would look a lot better if GNBT hadn't dumped recently. I also have 10% cash.
As I sold the TVIX shares, I also sold the stocks hardest hit by the overall market drop. I replaced these stocks with PEP, BRK.B, and PANW. PANW is the only higher risk stock (besides GNBT) in the portfolio. The thought behind purchasing PANW is the move to working from home. I'm guessing that companies need to invest much more in cyber security. I didn't research this thoroughly so there may be a cyber security company better equipped to do this than PANW.
Bottom line: I believe TVIX did serve as a hedge in this environment. It's also a comfort to have 10% cash. I'm not sure TVIX would work well in every environment. However, as vol dropped, it became very cheap, and I added shares gradually as vol continued to fall.
The cheapest shares were purchased at $39.50 and I sold the most expensive shares at $900+. In hindsight it might have been better to hold the shares longer. It also would have been better if I was more familiar with options.
I'm still a couple years away from taking mandatory IRA distributions. If COVID-19 occurred 6-12 months from now, I would have kept much more in cash. Hope this helps.
I originally purchased 105 shares. I intended to buy at least 100 more, but COVID-19 hit and the price exploded. I still have 5 shares with total profit of about $3K.
As a hedge (to date) I have been able to limit losses in the portfolio to 10%. It would look a lot better if GNBT hadn't dumped recently. I also have 10% cash.
As I sold the TVIX shares, I also sold the stocks hardest hit by the overall market drop. I replaced these stocks with PEP, BRK.B, and PANW. PANW is the only higher risk stock (besides GNBT) in the portfolio. The thought behind purchasing PANW is the move to working from home. I'm guessing that companies need to invest much more in cyber security. I didn't research this thoroughly so there may be a cyber security company better equipped to do this than PANW.
Bottom line: I believe TVIX did serve as a hedge in this environment. It's also a comfort to have 10% cash. I'm not sure TVIX would work well in every environment. However, as vol dropped, it became very cheap, and I added shares gradually as vol continued to fall.
The cheapest shares were purchased at $39.50 and I sold the most expensive shares at $900+. In hindsight it might have been better to hold the shares longer. It also would have been better if I was more familiar with options.
I'm still a couple years away from taking mandatory IRA distributions. If COVID-19 occurred 6-12 months from now, I would have kept much more in cash. Hope this helps.
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