Don’t Fear A QE Taper and The Market Reaction

you are exposed to a vulnerable market segment. Instead of these companies, you’ll want to hold ones you are willing to bet on long term and would consider buying more of at 20% or 30% lower than the current price.

Also beware of investments tied to interest rates – especially these that our Global Investing & Income Strategist Robert Hsu issued a “Strong Sell” warning on…

If you are seriously concerned, consider puts on the S&P 500 ETF Trust (NYSE ARCA:SPY). It would cost you about 3.5% to protect your portfolio. If the market does fall out of bed on tapering news, the puts will appreciate in value to offset losses in your portfolio. If it does not decline sharply, the options will expire worthless like other forms of insurance.

Another insurance move to make on a QE taper tantrum is inverse exchange-traded funds (ETFs). As Money Morning readers learned last month, there are plenty to choose from – go here for a rundown.

Money MorningWritten By The Money Morning Staff

We’re in the midst of the greatest investing boom in almost 60 years. And rest assured – this boom is not about to end anytime soon. You see, the flattening of the world continues to spawn new markets worth trillions of dollars; new customers that measure in the billions; an insatiable global demand for basic resources that’s growing exponentially; and a technological revolution even in the most distant markets on the planet.And Money Morning is here to help investors profit handsomely on this seismic shift in the global economy. In fact, we believe this is where the only real fortunes will be made in the months and years to come.

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