Ombud
There are times in which I have found that to do nothing is the right thing to do.
I am not sure if it will be helpful or not {I know you dabble with some Options}; but I can give a little depth to the thought above.
The back part of your post sounds to me like an outward expression of the realization that right now things in the Options Market are listless and in the Equities Market kind of feels as though it has fairly lost its mind.
If that is what it is don't fret so much; you are not alone in those thoughts and feelings. Many people are getting a sense that things are going to move very dramatically one way or another.
The Options market is telegraphing that; in that the price movements on a wide swath of things are very tight, and limited: if at all, day to day right now. The Equity Markets are telegraphing that via the actions that happen day to day right now; those actions really display a herd mentality: one day the herd runs up the hill for what ever reason, the next the herd runs down the hill for what ever reason.
Realistically what folks who catch on to the queasy feeling are seeing expressed is {and these are just the main things, mind you}:
- The market tying to re-adjust to something more "true".
When Interest Rates were dumped to Zero back during the 2007- 2009 the correlation between Bonds/Stocks held tight: Yields on
Bonds plunged, Stocks skyrocketed {Inverse Correlation}. Somewhere
along the way, that correlation broke; Bond Yields would bump higher,
but so would Stock Prices: Folks adjusted to this. Now, the Inverse
Correlation is returning; Bond Yields Tick Up, Stocks Drop like a Stone:
And folks nearly have a stroke.
- A largish group of market participants have positioned themselves, such
that their portfolios are fairly Static; they do move with the tide, but the
movement is mild to moderate. More folks are trying it seems to do this
with every passing day; though the space between their plateau and where
they are now is greater than it would be; if they had sought to do this even
six months ago.
- A growing number of market participants are realizing that "something wicked,
this way comes". In other words, more people realize that at some point that
the Markets are going to fall; what has them worrying is the "how" that will
transpire. Really, there are two ways things could land: {A} The Markets
correct (10-15%) in the face of all other things that have sway; this would give
"feet" to much of the action of the last 6+ years OR {B} The Markets spike up
{think outsized moved, no real catalyst}, and then plummet as folks "take the
money & run"; this is the scary way, as in such a situation: Selling, Begets more
Selling. which breeds panic, which leads to an Emotion driven environ: such a
situation could not only produce a multi-year bear, but it could also take out
20-40% of the overall Market valuations across the board {and no this is not
crazy to think, or say: Nor is it even the Worst Case Scenario}
More folks are now building cash, though many are behind the curve for the action; and sidelining cash removes liquidity from the markets. Many folks are trying to position themselves to be in the "right place, at the right time".
I had started saying nearly 3 years ago that folks needed to start building Cash, many thought I was nuts. But I kept saying it. My thought back then was, that if folks started squirreling away cash a little here, a little there while things were flying high, then even though they would get basically no interest, they would {A} preserve their liquidity & {B} be in a much better position for aggressive cash protection moves when the Markets started telegraphing that things were about to get "wild and nuts" and not in a good way.
I personally am positioned in such a manner that if the Markets crash, I will lose some money; yet make a bunch more than I lose: Net, Net my portfolio should remain rather static. If the Markets skyrocket, then I will have to honor some contractual obligations; yet I will make money on those and the "cover" plays that I have in place will also end up showing profit. Meantime, I have over $120K sitting in a Cash Position, which makes a paltry 0.01% interest daily now, but which as rates rise so will the Interest rate on this Cash and thus it will make more money as well..
To me personally I have heard the music and song for a long time; and IMO it is getting much louder, and the song goes "Ring around the Rosey, Pocket full of Posey, Ashes, Ashes;....."
But then, I could be dead wrong. All I know is that I have made a lot of money over the past several years doing the opposite of what everyone else has & and doing that which hardly anyone wanted to do..
