Now that doesn’t mean that you should run and hide until then. Indeed, now is the time to begin looking to build your bridges to the new bull market. A careful mix of short-term puts and long-term calls is your best bet at the moment.
Long-term LEAPS on such stalwarts as Mittal Acelor (MT:NYSE) and Chevron (CVX:NYSE) are available dirt-cheap right now. Their deltas enable them to double in value when these companies’ shares gain mere dollars.
Risk can be ameliorated through puts on such potential losers as the banks (shares of the bearish 3x bank fund Justice has mentioned of late would suffice just as well, as they are based on puts), retailers like the Gap (GAP:NYSE), and even such industrial players as Boeing (BA:NYSE) can be used to balance off any losses you incur, allowing you to remain in your long plays throughout the rough days that are bound to lurking ahead.
In the end, with some realism, diligence and hard work, I hope for, and indeed plan for, the best for all: friends, family, health and wealth.
