Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term

Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term

by Jay Pestrichelli, Wayne Ferbert

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Overview

Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term by Jay Pestrichelli, Wayne Ferbert

If you're trying to build wealth, sharp market downturns are your worst enemy. And today, they're happening far more often: in the last 18 years, the S&P 500 has experienced sixteen violent market declines. Institutions and professional investors have mastered powerful hedging strategies for dramatically reducing the risks of market volatility. Now, you can do it, too--and you can't afford not to. In Buy and Hedge , two leading investment experts show how to apply hedging as part of a long-term program for growing and preserving your assets. CNBC Fast Money guest Jay Pestrichelli and seasoned financial industry veteran Wayne Ferbert show how to systematically protect yourself against violent downward moves while giving your portfolio maximum room to run in upward markets. The authors' techniques are easy to use, can be applied to most investment vehicles, and require surprisingly little "care and feeding" once implemented. You'll discover how to:

 

·         Take advantage of the hedge-building mechanisms built into low-cost index funds

·         Invest in your ideas with confidence, because you've hedged the downside

·         Systematically manage portfolios for risk as well as return

·         Master and apply the "5 Iron Rules of Buy & Hedge”

·         Use options to manage risk, not to create excess leverage

·         Generate more dividends

·         Effectively manage cash

Product Details

ISBN-13: 9780132825276
Publisher: Pearson Education
Publication date: 09/29/2011
Series: Minyanville Media
Sold by: Barnes & Noble
Format: NOOK Book
Pages: 304
Sales rank: 982,049
File size: 5 MB

About the Author

Wayne Ferbert is a cofounder and principal of ZEGA Financial, LLC, a Registered Investment Advisor. He has spent his entire 17-year career in financial services, with 10 of them in the online brokerage segment with TD Ameritrade. In addition to managing business development as a member of the Senior Operating Committee at Ameritrade, which included M&A and market research, he ran product development. Prior to Ameritrade, he worked in planning and analysis roles at a Fortune 500 insurance firm and then a Fortune 500 bank. Wayne has an MBA in finance from Loyola University (Maryland) and a BSBA in finance from Bucknell University. He has his series 65 license. He resides in Ellicott City, Maryland, with his family. He has three daughters, ages 6, 8, and 9, and coaches their soccer team.

Jay Pestrichelli is a cofounder and principal of ZEGA Financial, LLC, a Registered Investment Advisor. He has 20 years of experience in business management, with 12 years in the online brokerage field with TD Ameritrade and Datek On-Line. As manager of the Active Trading business, he helped drive it to become number one in trade volume of U.S. brokers. During that time he was a regular contributor as a subject matter expert on CNBC’s Fast Money , provided video interviews for CNN, and has been regularly quoted in publications such as The Wall Street Journall and SmartMoney. Licenses include series 7, 63, 65, 24, 4, and 3. Jay resides in Omaha, Nebraska, with his wife, Lynn, and 6-year-old son, Zander.

Table of Contents

Introduction     1
Part I: Introduction to Hedging and the Markets     7
Chapter 1: Life Is a Series of Risk-and-Return Decisions–and So Is Investing     9
Chapter 2: Emotion Is Your Enemy, So Bid It Goodbye     15
Chapter 3: Don’t Forget Why You Invest     21
Chapter 4: The Investment Game Isn’t Rigged, But...     27
Part II: The Immutable Laws of Investing     33
Chapter 5: Capital Lost Is Capital That Cannot Grow     35
Chapter 6: Risk Is What You Buy; Return Is What You Hope For     41
Chapter 7: Emotion Is the Enemy     45
Chapter 8: Volatility Is Kryptonite     53
Chapter 9: The Taxman Cometh      61
Part III: The Five Iron Rules of Buy and Hedge     65
Chapter 10: Hedge Every Investment     67
Chapter 11: Know Your Risk Metrics     75
Chapter 12: Constructing a Long-Term, Diversified Portfolio     91
Chapter 13: Unleash Your Inner Guru     103
Chapter 14: Harvest Your Gains and Losses     109
Part IV: The How-To and Basic Tactics of Hedging     119
Chapter 15: Hedging with Options     121
Chapter 16: What Is an Option?     125
Chapter 17: Option Positions     133
Chapter 18: Understanding and Using Options     141
Chapter 19: Risk Graphs: A Picture Is Worth a
Chapter 20: Married Puts     165
Chapter 21: Collars     179
Chapter 22: Stock Replacement Tactic That’s Easy on Your Cash     193
Chapter 23: ETFs Will Look Great in Your Portfolio     205
Chapter 24: Portfolio Puts     221
Part V: Advanced Tactics     227
Chapter 25: Vertical Spreads     229
Chapter 26: Diagonal Spreads     249
Chapter 27: Managing the Cash in Your Portfolio     259
Chapter 28: Managing for Tax Efficiency     269
Chapter 29: Conclusion: Putting It All Together     277

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Buy and Hedge: The 5 Iron Rules for Investing over the Long Term 4.7 out of 5 based on 0 ratings. 3 reviews.
twiceagain More than 1 year ago
Good review of the what, why and how of hedging using puts & calls of individual stocks &/or ETFs. Introduced me to the concept of how to use ETFs & Indexes as "portfolio" hedges. Sometimes - apparently in the interest of driving certain points home - there's a little too much repetition. Overall, the investment strategies/rules advocated in this book are sensible and sound, designed to help individual investors weather the current climate of market volatility.
Anonymous More than 1 year ago
Anonymous More than 1 year ago