. The group dives into Monday's stock dip, understanding the VIX volatility index and the odds of an impending rate cut.Cutting through the noisy numbers, the mayhem and the hyperbole to make it easier for you to find the right investments for your portfolio.And uh I can't mince words, words about this.Our phrase of the day is also risk management and this episode brought to you by the number five that so many rate cuts.
You can do that, but you can also buy a target date fund, which is what a lot of passive investors do and those balance your risk as you get older, nearing that retirement date, that's been a popular choice for a number of years.
So if the stock breaches that point, they're out automatically also most traders, most advanced traders never risk more than two or 3% on one individual trade.And ps they do most of their trading within a 2 to 3 hour window probably early in the morning, make their trades.So they're protecting themselves on the downside, they're mitigating their risk by not going in too hard on any one trade.
This would be a great time to buy protection, but in fact, the best time to buy protection is when you don't need it.Uh So it's a little bit late for that, but this is, this conversation is about helping people prepare for the future.Well, you mentioned that the best time to buy an umbrella is three or four days before the rainstorm.So, yeah, it's a good time to always buy protection and make sure you're always have that understanding inside your portfolio.
But we also have always in effect what we call our backup or our goaltender option to make sure that when things start to sell off, we are not completely exposed to that and we'll shift assets from one part of the portfolio to the other based upon market conditions.We don't do that because the financial TV, headlines are screaming markets in meltdown.
And we, we remember from the COVID, uh, when the COVID pandemic hit and everything was shut down, they didn't really wait for a Fed meeting to make those moves and they didn't wait during the financial crisis. So they don't worry about the election and they say they don't worry too much about the stock market.So this is my first, uh, like interest rate cycle watching the fed hike all the way up.Not cut fast enough for so long?Then it was not, then it was not, I guess, like, I just don't get as someone walking around on the street, why they didn't just do one little pre emptive cut, maybe 25 basis points.We've been covering markets a long time.
Yeah, fed rate cuts get investors excited because money becomes cheaper and companies borrow more, they expand, they hire, they acquire other companies that can be a good thing. We don't react to political influences and we don't react to markets influences, but sometimes the market influences start to bleed into the economy and that's where the fed has to get active.That was the highest since March of 2020 the depths of the pandemic.That's in the sixties and March 12th, 2020 the S and P 500 would close down 26% from its recent all time high that day.Roughly the same level on the VIC, the S and P is only down 7 8%.
They also put test prep for people who are trying to get into uh into trading, whether it series 673 people trying to get into the capital markets.1999 they had this idea that if maybe they put that dictionary online, maybe this company in California called Google that was being found in this garage and mountain view might want to index and, and point people to that.
We just don't talk to all the communities that need it, especially the underserved communities and especially really young people.But we wanted to put our content in our curriculum to educate young people about money front and center into high schools. Uh But if it's not review rereview, the sections on risk management that will serve you Well, signing off here, Jared Blicker for Yahoo Finance.Breanna Stewart and the other moms on the US women’s basketball team are enjoying some special moments while chasing Olympic history.
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