Learn strategies to safeguard your profits and navigate potential market downturns

  • Put options can help investors lock in gains during a potential stock-market correction
  • Waiting and staying invested is generally the best strategy during a correction
  • Selling losers and reallocating to defensive stocks can also protect profits
  • Consider using put options on market-index ETFs to hedge against declines

Put options are one way to lock in some of the bull-market gains investors have enjoyed over the past year. The past five years have been good to stock-market investors, with the S&P 500 index climbing 12% annually. However, signs are emerging that the stock market could be due for a breather. Financial advisers recommend waiting and staying invested during a correction, as they tend to be short-lived. Selling losers and reallocating to defensive stocks can also help protect profits. Another strategy is to consider using put options on market-index ETFs to hedge against declines.

Factuality Level: 7
Factuality Justification: The article provides a detailed analysis of the current stock market situation, including historical data and expert opinions. It offers various strategies for investors to protect their gains in case of a market correction. The information presented is factual and based on market trends and expert advice, without significant bias or misleading information.
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the current stock market situation, potential risks, and strategies for investors to protect their gains. It offers insights into using put options, selling losers, playing defense, and considering different investment strategies. The information is relevant and actionable for investors looking to safeguard their profits in the face of a possible market correction.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses strategies for investors to protect their stock profits in the event of a stock market correction.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article focuses on the potential for a stock market correction and provides strategies for investors to protect their profits. While there is no mention of an extreme event, the article is relevant to financial topics and provides information that could impact financial markets and companies.
Public Companies: SPDR S&P 500 ETF Trust (SPY)
Key People: Jack Ablin (Chief Investment Officer at Cresset Capital), Karim Ahamed (Investment Adviser at Cerity Partners), Amanda Agati (Chief Investment Officer of PNC’s Asset-Management Group), Michael Sheldon (Executive Director of RDM Financial Group), Dan Weil (Writer in West Palm Beach, Fla.)

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Reported publicly: www.wsj.com