July 10 What is a collarAll in all it was a wild and wicked week last week, writes VectorVest Founder Bart DiLiddo in his weekly Strategy review. “It’s best to stay on the sidelines for a while,” he concluded. Continuing to move your weakest performers to cash is a good defensive measure in this type of market. However, if you prefer to hang onto stocks with unrealized gains, this week’s Strategy of the Week Special Presentation demonstrated the ‘Collar’ options strategy as a way to do it while insuring your portfolio against a major collapse.

STRATEGY OF THE WEEK: “LOW COST PORTFOLIO INSURANCE.” This week we have seen multiple reasons to look to insure our portfolios against loss. Greece and China have provided enough volatility on their own and Wednesday’s market shut down really caused concern.  It’s timely therefore in Friday’s Special Presentation, Dan Misch, Director Of Retirement Services, showed us how to calculate the amount of insurance you need to protect your portfolio from these factors.

We will be holding a live webcast tomorrow, Monday, July 13 at 12:30 p.m. ET where we will host a Q&A session related to this strategy presentation. We’ll also take a look in Realtime how the market is starting out the week, and we’ll look for possible winners and losers for further study. To register for this webcast CLICK HERE Space is limited.

July 10 What is a collar

The Week it Was. China lost $3 Trillion in stock market value over the last three weeks before Friday’s one day rally. Greece moved the market early in the week as the country voted to reject austerity measures. Prime Minister Alexis Tsipras late last week presented a plan that seemed to incorporate even stronger austerity measures. Sunday was decision day but now Greece has been given three days to push its new austerity measures through parliament and keep alive Greece’s chances of staying in the euro. The delay is almost certain to increase volatility in global stock markets including Canada and the U.S.

The graph below shows the volatility we experienced in our Canadian TSX Composite.
July 10 PTSE