TDI Podcast: Market Correction Gameplan (#547)

Constant talk of good fundamentals and earnings had many investors adding leverage as volatility was non-existent. Risk has not been a concern for some time and portfolio leverage grew to historic levels.

Then the spark that lit the fire –  a sudden rise in yields caused panic which resulted in a market malfunction. We discuss some of the important reasons why this occurred and how indiscriminate buying and selling will continue to be a problem.

What to do in a correction? Some back to basics and a look at proper risk tolerance and time horizon guidelines.


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In this episode we discuss how passive investments (ETFs) are one of the culprits of the recent meltdown. As investors simply  buys or sells baskets, they are potentially moving moving hundreds of stocks at a time – indiscriminately. No wonder why moves have been so pronounced.

 

Stocks discussed in this episode – (VIX), (SVXY), (XIV), (SPY)


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