Reverse ETF S&P 500

I mentioned in a previous article that I thought the market would pull back some during the summer months. It looks to be the case, with the recent turn of events. A pull back was to be expected after such a rapid run up in stock prices. Barron's had an interesting article on this at:


http://online.barrons.com/article/SB124579457810443905.html?mod=googlenews_barrons


This is usually the time of year when I take advantage of lower stock prices to add to my long term holdings, reducing my average price per share and increasing dividend income. As a new tactic, I've decided to invest in a reverse ETF or exchange traded fund called Short S&P 500 ProShares (ticker symbol: SH). In theory, a reverse ETF shorts the market and should move in the opposite direction of the stock market. In this case, since I expect the market to go down some, the shares in SH should move up, balancing out my portfolio. This is a way of shorting the market with less risk than opening a margin account. I'll keep readers posted on how it works out.

Re-invested in Universal Insurance (UVE) for my regular portfolio on price pull back, looking to add more shares if the price goes lower. Also added Calumet Specialty Products (CLMT) as a long term holding for their dividend payout. Not much going on with my recent purchases in energy limited partnerships, but with the good dividends, I can afford to wait for upward movement with those.

Stock Portfolio Update

With such a crazy market since the first of the year, it's easy to just sit on the sidelines and wait for more stability. Always the bull, when it comes to the stock market, I can't help but see opportunity everywhere! My IRA account, which I opened in December, is up 14.5% for the year. AFLAC (AFL) was my best purchase for this account, up an astonishing 67% since my original purchase. I think it will go even higher. Advance America Cash Advance (AEA) earned me a whopping 97% gain for my regular investment account.

So even though it's been a rough ride for the first five months of the year, as far as I'm concerned, it has presented us with a very rare opportunity to make some marvelous short term trades and fantastic long term investments.

I don't want anyone to get the idea that my life has been smooth sailing through this economy. My job shut down on January 10th and I'm still looking for work. I've had to cut back on the amount of money set aside for investing and I've practically stopped buying anything aside from the basic necessities. But I've been through much worse and this too will pass.