I recently loaded up on 2x inverse funds yesterday aftenoon in fear and now I am missing out on the gains. I give up on this manipulated crap.
Wow. This brings up several points that are always worth revisiting. If you never take any defensive steps in your investment lifetime (30-40 years minimum) you save properly, and you allocate properly over time you have an outstanding chance of ending up with enough money.
The next point is that the stock market has an up year 72% of the time.
These are two very important big macro points that investors need to be cognizant of before devising exit strategies, trading philosophies or anything else. If you bought the S&P 500 the two days before the 1987 crash (the market was down about 2% the day before the crash) and just sat tight for ten years you would have more than tripled your money.
Sitting tight is not easy but this is the back drop.
The decline that the market is working through right now is well within the realm of down a little and normal stock market volatility. It is very unlikely that an investor can regularly game 5% moves in the market. The notion of loading up (although this is not defined in the comment) on inverse funds is a speculative one and with apologies to the reader gives a lesson to learn by.
The only context I have ever touched on with these is as a means of reducing exposure. As a hedge they are very simple and not disruptive to the portfolio.
Another fundamental belief is that I would not load up on anything. I still see commentary advising 20%-ish in gold which to me seems to introduce a ton of volatility to a portfolio except when priced in the Malawi kwacha (Peter Schiff heckle).
One thing I tell people every now and then about what I do with portfolios is that the market goes up most of the time, I'm just trying not get in the way and mess that up.
The defensive action I took last summer was poorly timed but not extreme and so the consequence was a lag for a few months. From the bottom in July to year end the SPX rallied about 15%. Lagging a move like that is not detrimental to the long term, missing it could be.
Most people do not need to manage against a one year time period let alone one week.