|Happy Weekend! Check out what's been going on in my world and some of the best articles from around the blogosphere.|
The big decline was credited to interest rate hike fears. Fed speak might have been the actual reason for the change in investor sentiment, but it's important to remember that the stock market was far from valuations that reflect the fundamentals of the underlying businesses. But with the Fed involved who knows what the next move in the markets will be. Since the tech bubble/crash we've had the Greenspan "put", the Bernanke "put" and now the Yellen "put" to support asset prices over facing the economic realities.
About the only green in my portfolio on Friday was the call option on volatility that I bought last month. The premise behind buying the call was that everything was way too quiet during August and I expected to see the markets embrace the volatility at least. The VIX index spiked up to 17.5 and on Friday alone that represented a 30%+ return, although I'm only sitting on a 14% gain from my purchase.
There's still a long ways to go on the option and timing is critical to maximize the returns from this trade. With over 2 months until expiration I think I'll still ride it out because I think there's potential for some big returns. Even if volatility declines from here, Friday showed us how quickly things can change.
Other than Friday's action this week was rather boring. Although I did open up one more option position on the expectation of higher volatility. I'll detail everything over the coming days. There was even another dividend increase which is always welcomed.
What did you think about Friday's drop? Is there more in store or will we move higher from here? Did you add to your portfolio?
On to the Roundup
In case you missed them, here's the posts from Passive-Income-Pursuit over the past week.
- Dividend Update - August 2016
- Dividend Growth Investing at Work - Can You Hear Me Now?
- Recent Transaction - Sold to Open Call Option
- Recent Sell and Position Close
Once again I'd like to say thanks to each and every one of you that read, commented, and shared posts from here this past week. I think this dividend growth investing and financial independence community is amazing and the openness from everyone is awesome. Thanks again!
Now on to the links!
Overvalued Consumer Staples - A Threat to DGI by Ted Fischer on Seeking Alpha
Pursuing Freedom Interview #8 - Investment Hunting on It Pays Dividends
Recent Sell - Realty Income Corp. by Roadmap2Retire
The World is Speeding Up, We're Eager to Slow Down by Our Next Life
Why Walgreens is Long-Term Buy Now by Sure Dividend
Preparing for a Stock Market Correction by Dividend Growth Investor on Seeking Alpha
Dividend Income Update August 2016 by DivHut
Dividend Stocks Look Expensive...But Does This Matter? by Financially Integrated
Home Run #6 by DivGro
Our Financial Independence Assumptions - What About Taxes? by Tawcan
Ask the Readers - Is Tax Prep Assistance Worth the Money? by Income Surfer
Recent Stock Purchase by Dividend Life
Disney (DIS): 3 Risks to Consider Despite Strong Dividend Growth by Simply Safe Dividends
September 2016 Dividend Growth Watch List by Building Income Investments
How My Stock Portfolio Has Skyrocketed by Dividend Diplomats
Also, if you're looking for investment ideas, A Frugal Family's Journey keeps a list of stock analyses and recent buys from fellow bloggers.
I hope you all have a great weekend!
Image courtesy of Gubgib via FreeDigitalPhotos