The Next Best Move For Investors [Dow Jones Industrial Average, SPDR S&P 500 ETF Trust]

Russell 2000 Small Cap Index Chart

Chart courtesy of www.StockCharts.com

At this point, I’m not convinced upside moves in stocks are sustainable, especially without any sustained leadership from the financials or technology stocks.

As such, I suggest you add some put options to your large positions or the key stock market indices that reflect the focus of your holdings. For instance, a technology-focused portfolio can be hedged using put options on an exchange-traded fund (ETF) like PowerShares QQQ (NASDAQ/QQQ) or on small-caps with the iShares Russell 2000 (NYSEArca/IWM) ETF. You could also hedge against a downward slide in technology via an ETF like the Direxion Daily Technology Bear 3X Shares (NYSEArca/TECS).

This article is brought to you courtesy of George Leong from Profit Confidential.

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