My Bear Market Option Strategy

I’m hearing this question more and more…

“Doc, how does your options-selling strategy change in a bear market?”

The current bull market has lasted a remarkably long time. More headlines are touting the end of the bull market, and I can see some of my readers are getting nervous.

I can’t predict when the next bear market will hit. Nobody can. That’s why I position my portfolio to be ready for anything.

An upward or flat market does work better for option selling, but yes… we can survive a bear market, too.

We’ve got three automatic protections in place. I can’t share all three of them here, but I will tell you the most important… we only sell options on stocks we would actually want to buy and would be willing to own.

Beyond that, we’ve got a broad range of other option tricks that we can use to ride out a bear market. And don’t worry, I’ll keep you up to date on what’s going on…

In my Retirement Trader newsletter, I explain as much about our thought process as I can. I hold very little back. I want you to know what I’m thinking about every trade we make.

That means analysis of the market and the economy… profiles of the companies we’re investing in… as well as constant updates to our educational materials.

And at the end of each issue, I answer specific subscriber questions in our question-and-answer section. The details of the questions are important. And I often find bigger issues within the questions – ones that involve the state of the market, how we deal with losses, or our basic trading philosophy.

Click here to learn more about Retirement Trader.

Are you worried about where the market is going, or are you still putting your money to work? Let us know at [email protected].

Q: What if a person is too nervous to deal with puts, or not sufficiently available to exercise your advice? Can the advice be sent to a broker who would regularly execute them? If so, can you recommend brokers who would do that? – A.S.P.

A: That’s exactly why we offer covered-call strategies alongside our put trades in Retirement Trader. As I said last week, I know that not everyone can sell naked puts… whether it’s because they can’t get approval from their broker, or because they trade in a retirement account that prohibits naked-put selling.

In Retirement Trader, I give you everything you need to complete the trade. I even have a video series where I show you how to trade in your brokerage account.

The problem with having a broker handle your trades for you is the higher fees you’re likely to pay. I can’t recommend brokers, but I discussed why I prefer using discount brokers – and listed a few brokers that readers have enjoyed using – right here.

Q: Could you point me toward some articles/websites you might recommend for someone keen to get into meditation. – S.G.

A: I’ve written about some of my favorite beginner’s tips for meditating.

When you begin meditating, you might feel overwhelmed by all of the information out there. I’d recommend reading The Relaxation Response by Dr. Herbert Benson to start. Benson is a cardiologist who studied meditation and its effects on the heart back in the 1970s. You can also read Why Meditate? by Matthieu Ricard. Ricard is a PhD-holding geneticist who has dedicated his life to practicing Buddhism as a monk in Nepal.

Q: I just read your letter on salt. Thank you so much. I am printing it so when I need to refer to it I can. If I got it right when I cook a roast I can salt it. Enough eating cardboard. – E.J.

A: I’ll never understand the belief that a healthy diet needs to be boring and bland. There are lots of foods that have been villainized over the years.

Longtime readers know I believe in moderation. Whether you enjoy eating salty food, having a glass of wine with dinner, or eating bacon with breakfast, don’t worry too much about harming your health… as long as you don’t overdo it.

Don’t let the Nanny Police dictate everything you eat, and enjoy what you love. (Just in moderation.)

What We’re Reading…

Here’s to our health, wealth, and a great retirement,

Dr. David Eifrig and the Retirement Millionaire Daily Research Team
Baltimore, Maryland
August 11, 2017

Are You Watching Our New Video Series?

Every Friday afternoon, we release a video answering a question from a reader. This week, we explain when to start investing in your IRA… And we explain the two things you need to consider beforehand. Watch it here.