Today’s video walks through the various ways you can put money to work in this bear market. We’ll compare a variety of methods including naked put ladders, seed sowing, dollar-cost averaging, and buying all at once.

Notes

Assumptions

1. I want to buy the broad market via SPY or IWM or QQQ
2. I have a long time horizon

Question: When do I buy?

1. Buy when you have the money because the market tends to rise over time. 3 out of every 4 years, stocks are higher.
2. I could buy some now and some later to hedge my bets.
   1. Buy 10% every month for the next 10 months.
      1. Fully invested 10 months from now. Implicit bet here is that the market will be lower at that point.
      2. Dollar-cost averaging doesn’t reduce risk, it just delays it. It means you’re not fully invested now, but will be in 10 months.
      3. The longer it takes you to get the money invested, the worse your odds.
3. Wait for a technical signal such as a trend reversal
4. Seed Sower: I want to put money to work in a downturn, but don’t want to buy too quickly.
   1. I want to participate and buy some at a discount, but not buy all until we get a really steep discount.
      1. –10% off the highs: buy 1/3^rd
      2. –20% off the highs: buy 1/3^rd
      3. –30% off the highs: buy final 1/3^rd
5. Ladder into naked puts at set intervals
   1. i. Sell 1 month 5% OTM put
   2. ii. Sell 2-month 10% OTM put
   3. iii. Sell 3-month 15% OTM put
   4. iv. Assuming you can buy 300 shares.

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