Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term
Product Author Bios
Jay Pestrichelli (Omaha, NE) has twelve years of online brokerage experience with TD Ameritrade and Datek On-Line, managing an Active Trading business to become #1 in trade volume among US brokers. He has appeared on CNN and CNBC's Fast Money; has been quoted in The Wall Street Journal and Smart Money; and is a Minyanville "Professor." His content on buy and hedge investing is among Minyanville.com's most popular.
Wayne Ferbert (Ellicott City, MD) has spent nearly 20 years in financial services, including ten years at TD Ameritrade's online brokerage business, where he managed business development as a member of the firm's Senior Operating Committee.
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
22 of 24 people found the following review helpful
Like a seat belt for the stock market,
This review is from: Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term (Minyanville Media) (Hardcover)If you've never thought about protecting your retirement investments or college fund by hedging (i.e. buying insurance), you should read this book.
If you've never thought about trading option contracts to REDUCE risk in your portfolio, you should read this book.
If you're investment style is still based on buying a bunch of stock mutual funds and some bond funds and then refusing to look at your account statement for years on end, then RUN to your PC and order this book. And pay for express shipping.
Having worked with Jay and Wayne for a number of years, I know they've spent plenty of time in the financial service industry trenches and they have seen more than enough people screw up their futures by blindly adhering to losing investment strategies day after day.
They offer a conservative, time tested approach to protecting your capital. And while they will never win a writing award (enough with the pizza coupons already), they try hard... Read more
14 of 15 people found the following review helpful
Buy & Hedge - A must read for today's market,
This review is from: Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term (Minyanville Media) (Hardcover)The timing couldn't be any better for this type of book. If you aren't at least a little uneasy investing in today's volatile market than you should check your pulse. I am not a "sky's falling" type of person but for anyone that has had to start over after 2001 and again after 2008 you definitely understand the value of defining your risk for every position you enter. I found this book to be an easy read. Each chapter and topic covered are nice and short making it easy to pick up and put down without having to start over. The authors also had some fun with the examples and stories used making it actually enjoyable to read and not boring and dry like so many other similar type of books. The profit/loss graphs made even some of the more complicated strategies easy to comprehend. Whether you are just beginning, been trading forever, trade a 100 times a year, have never sold anything you ever bought, trade for growth or trade for income, do it all on your own or trust someone else... Read more
18 of 21 people found the following review helpful
Expensive risk control,
This review is from: Buy and Hedge: The 5 Iron Rules for Investing Over the Long Term (Minyanville Media) (Hardcover)
Customer review from the Amazon Vine™ Program (What's this?)This book will be educational for new investors and traders for the explanations on how to hedge investments and trades.
It also gives readers the five iron rules of Buy and Hedge:
1. Hedge every investment.
2. Know your risk metrics.
3. Construct a long term, diversified portfolio
4. Unleash your inner guru.
5. Harvest your gains and losses.
While the authors suggestion of controlling downside risk is great advice, it can be done much easier with simple stop losses than by purchasing expensive options that are sometimes 5% to 10% the cost of the stock or ETF itself. This really hurts the possible upside in any investments, you add in the slippage of illiquid options and commissions and the authors strategy gets very expensive. When simply cutting your losses when a stock drops below near term support or 5% would have the same basic affect as their hedging strategy.
Also in bear markets their strategy will of course out... Read more
› See all 47 customer reviews...
Online Sample Chapter
Table of Contents
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
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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