I Be Making Trades Yo!!
Ok so this week has been absolutely breathtaking. We've had a 5% rally in the S&P 500 in only 1 week's time. We've had all kinds of commodities come down a lot, which has unfortunately also hit gold like a sledgehammer and gold is down about 4 or 5% in the last couple weeks too. Gold generally is weak during the summer, so considering the big run up in everything else we've got I've decided to be a contrarian.
In my IRA today I've sold my insanely awesome REIT Annaly Mortgage (NLY) and put some of the new cash I've been adding in for the last couple months to work and have bought a Dec 17 130 Call for the GLD. With the debt ceiling in danger of not being raised in time in early august, although we have resolved the immediate crisis in Greece for awhile, we still have our own problems to deal with and until today I didnt have any exposure to gold in any of my retirement accounts. Gold will be the only thing to go up if the we default on our debt. I cant afford not to have any in there. Sept is the big wedding season in India and China and that's when we get a huge rally in the price of gold, and so I'm positioning myself to be ahead of that as well.
Now the more interesting part is what to do with my discretionary account. I locked in profits today just before the market closed. I made 70% on my money in two weeks amd im now up 12% year to date overall, beating the s&p by 6%. Now That I cleared my cash from that, the question is what to do with it then. I'll need to take a $1,000 out and pay my debt down with that, but the profits off my trade I'm going to reinvest and see if I can make it grow again. The question is do I buy the underlying stock from my options trade CAT? which I think will have a great quarter in a few weeks, do I play it safe and buy an S&P 500 index fund so I can be properly diverisified, or do I buy NLY for my discretionary account so I can start cashing in on a big dividend and protect myself in case this rally changes direction and goes back down? I'll have some big decisions next week.
Ok so this week has been absolutely breathtaking. We've had a 5% rally in the S&P 500 in only 1 week's time. We've had all kinds of commodities come down a lot, which has unfortunately also hit gold like a sledgehammer and gold is down about 4 or 5% in the last couple weeks too. Gold generally is weak during the summer, so considering the big run up in everything else we've got I've decided to be a contrarian.
In my IRA today I've sold my insanely awesome REIT Annaly Mortgage (NLY) and put some of the new cash I've been adding in for the last couple months to work and have bought a Dec 17 130 Call for the GLD. With the debt ceiling in danger of not being raised in time in early august, although we have resolved the immediate crisis in Greece for awhile, we still have our own problems to deal with and until today I didnt have any exposure to gold in any of my retirement accounts. Gold will be the only thing to go up if the we default on our debt. I cant afford not to have any in there. Sept is the big wedding season in India and China and that's when we get a huge rally in the price of gold, and so I'm positioning myself to be ahead of that as well.
Now the more interesting part is what to do with my discretionary account. I locked in profits today just before the market closed. I made 70% on my money in two weeks amd im now up 12% year to date overall, beating the s&p by 6%. Now That I cleared my cash from that, the question is what to do with it then. I'll need to take a $1,000 out and pay my debt down with that, but the profits off my trade I'm going to reinvest and see if I can make it grow again. The question is do I buy the underlying stock from my options trade CAT? which I think will have a great quarter in a few weeks, do I play it safe and buy an S&P 500 index fund so I can be properly diverisified, or do I buy NLY for my discretionary account so I can start cashing in on a big dividend and protect myself in case this rally changes direction and goes back down? I'll have some big decisions next week.