Fidelity Investments. Use options to protect your stock portfolio Outside the Box - Ma. By Michael Sincere and Mark Wolfinger BOCA RATON, Fla. (MarketWatch) -- Many investors have heard horror stories about options. "They're too risky, too complicated, and too speculative," some have warned. Contrary to that belief, options are not always risky or complicated. 1. This popular options strategy is primarily used to enhance earnings, and yet it offers some protection against loss.
Dialing into dividend growth Cash-rich companies are increasingly sharing the wealth by giving stockholders larger dividends. The stockholder receives cash up-front. 2. When you buy puts, you will profit when a stock drops in value. It's important to note that there is not one strike price that suits all. One of the advantages of buying puts is that losses are limited. 3. Collars represent the most popular method for protecting portfolio value against a market decline. The collar is a combination of the two methods noted above. 4. The idea is to eliminate stocks and replace them with call options. Bonds: Avoid the next great bubble - Jun. 4, 2010. By Paul J. LimJune 4, 2010: 5:20 PM ET (Money Magazine) -- As manias go, this one is different. Your neighbors aren't coming up to you at cocktail parties bragging about making a killing in bonds.
No one is flipping fixed income for quick profit. Don't let the lack of fanfare fool you. "The bond market is a bubble," says Robert Froehlich, senior managing director of the Hartford Financial Services Group. What's inflating the bubble Like all financial manias, this one is being fueled by a combination of fear and greed. James Stack, a market historian and president of InvesTech Research, notes that many baby boomers who have stampeded into bond funds did so in reaction to their stock losses since the financial crisis began in 2008. "It's post-traumatic shock," he says. Over the past decade, holding bonds was considerably safer than holding stocks. On top of that, few investors know what it's like to live through a true bear market in bonds.
So that's the fear part. Why the bubble could burst. Ken's Stocks Blog.