We've obviously moved beyond the 'worried' stage in the early part of 2009. Although the markets have staged a significant recovery since the recent lows, there's no guarantee those lows will hold. Many observers believe the bottom has been seen, an I ave no idea if they are correct. As I update this page (6/22/2009) the market has staged a recovery of approximately 40%. That's a huge rally. Sure, it appears to be the start of a huge bull market, but keep in mind that bear market rallies are known to be fierce. And quick. Thus, I'm afraid to jump onto the bull bandwagon. For me, it's still a hedging strategy with limited gains and limited losses.

These markets have been devastating to long-term buy and hold investors. But, if you have taken advantage of the collar strategy or the idea of buying insurance to protect a trading (or investment) portfolio - as described in Chapter 20 of The Rookie's Guide to Options, then you should be okay. But, the methodology is very much worth learning so you can be better prepared in the future.

Hopefully, this is a once in a lifetime experience for all of us. When this is all over, it will turn out to have been a great investing opportunity - especially for youngsters who have many years to allow investment profits to compound and grow. Yet, we must remember that it can take a very long time for this to 'be over' and for the stock market to recover. I have no idea how each of you should treat his/her retirement portfolio, or a regular investment portfolio. My teachings stress trying to earn profits, with reduced risk. All I can say is that I hope that most of you learned something useful from this website and have indeed protected a significant portion of your assets. If you have a story to tell, please share it.

• Now that the government bailout is law, will it prove to be a disaster? Will Treasury Secretary Paulson buy mortgage debt at a price favorable to his employer (that's you and me, and all American citizens) or will he overpay for those securities as a friendship gift to his former cohorts on Wall Street? He has a chance to be a hero. UPDATE: It appears that the cash is going to be used to guarantee that banks will be making loans and perhaps the US government will even be buying shares of the banks. that's a better idea than simply buying garbage mortgage backed securities. We surely do live in interesting times.



• Are you worried about the obvious recession (or depression) and that the markets may tumble even further when it's becomes official that the recession has arrived?
Or that the serious decline will continue? Or that volatility will increase as this market moves wildly in both directions? UPDATE It's already happened. The declines are of historical proportions and volatility has reached levels not seen since the crash of 1987. [The implied volatility of options is not as high as 1987, but the market itself has been much more volatile.]


• At the same time, have you been afraid to pull your money out of the markets because of the fear of missing out on substantial profits? As the market has fallen further, are you holding on, or have you used options to hedge your positions? No one can tell you what to do, but one good piece of advice is NOT to touch 401k plans. I'm not a financial advisor, so I'll stop discussing this point. But it's wise to use options as protection when feasible. If you are not familiar with risk-reducing option strategies, please peruse this web site as well as my blog.



• Would you still like to participate in any stock market rally, but avoid losing money in a bear market? We all would. There is certainly less risk associated with buying stocks now, but for most people, it's very difficult to jump in when many are still petrified. If you have no investments, this may be a good time to nibble. There's no point in investing everything at one time - that's just too much of a gamble. However, it's not too late to learn how to protect your assets with good, conservative option strategies.



• Will Obama be able to restore confidence, or will the overwhelmingly bad economic conditions continue to weigh heavily on the stock market? Will he and his team make the winning decision regarding the treatment of the large banks?

If you answered 'yes' to any of these questions, then you have much to gain by understanding how options work because they can help you meet your financial goals with significantly less risk.