Profiting From Stock Market Volatility

When people talk about volatility it’s usually seen as negative, a destroyer of wealth. In this video, I explain how we can turn that on its head and I show you three ways in which you can use volatility as a way of increasing your returns.

This is not financial advice. When investing, your capital is at risk. Investments can rise and fall and you may get back less than you invested. Terms and conditions apply.

What Else PensionCraft Offers:

Timestamps
00:00 Introduction
01:54 Yield Enhancement / BuyWrite Strategy
09:18 Carry On Saving & Investing Strategy
11:53 Rebalancing Strategy
15:44 Conclusion

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DISCLAIMER
All information is given for educational purposes and is not financial advice. Ramin does not provide recommendations and is not responsible for investment actions taken by viewers. Figures that are quoted refer to the past and past performance is not a reliable indicator of future results.

[kygo]

Fantastic video and insight Ramin, I always come away from your videos feeling like I actually learned something!

[GavinLawrence]

Having a rotten Saturday and this has cheered me up so much and inspired me to get on with today's challenge (DIY) thanks pensioncraft

[MagicNash]

At around 13:00 notice how the 60/40 portfolio with BONDS outperformed the SP500 at quite the few years (around 2008-2014). Bonds are so underappreciated because we've been living during huge stock market bull markets for quite a long time. So it makes sense. Bonds are not sexy, only when they are because they outperform stocks😂Considering how impatient the average investor seems to be this is important to consider.

[mxmus]

Timely given Chrm Powell’s recent comments re rate cuts. Keep dropping these gems, Ramin.

[stevegeek]

I just added QYLP to my SIPP as a satellite, after selling some of my UK Gilts and MMF. As a retiree I like the idea of having a few hundred £s regular monthly income…let’s see. QYLP is <10% of my portfolio. I’m still keeping VHVG as my core fund.

[lfeldman]

Are there only 2 buy write etfs in the uk? Thanks for all the great content 😊

[MagicNash]

If you are tax efficient dollar cost average investor who is diversified and patient you LOVE volatility, because that makes long-term stagnant, BUT VOLATILE, investments suddenly quite profitable, since you will also be buying them when they are low. There are plenty of ETFs which track country indices, certain sectors that if lump summed long ago would be down - even massively down - not for years, but for decades. Japan, many emerging market countries like Brazil, Turkey indices, some developed countries like Spain, France can fall into these categories...If you look at the past 30 year history.

[itrymariti]

Doesn't the buy-write strategy also inhibit the fund achieving a post-crash bounce assuming the fund keeps selling off the upside (i.e. recovery potential) after the dip?

[akshaypotdar]

For the UK investors, for the tax purposes if you are investing outside the ISA, are the dividends from XYLP and QYLP considered as dividends or income? Outside ISA, tax-free dividends are up to £500 where as if considered as income then taxed as per your income band.

[MagicNash]

You should be hoping for a crash AND a recovery, not just a crash though!😅After all, whats so good in a crash if it doesn't recover in your investment lifetime?

[JTW-]

Great video as usual! Could you give me your logic why you have chose ti invest most of your money into a developed world index and not global etc? I have took a similar position in most of mine goes into fidelity index world, hsbc ftse all world, vanguard developed.

[josepha]

Have experimented over the years with various options strategies, credit/debit spreads, calendars, strangles, straddles. What I found was that I couldn't sleep well. For one thing, could not trade with a Cash account, had to use Margin. I had to phone the trades into my broker although today there are platforms that allow you to set trades up online. You know, its one thing to own shares of a stock and be underwater while (hopefully) collecting dividends and waiting for the shares to recover. These exotic derivatives trades, I guess, are just not for me. My sole use of volatility is when the market sells off violently and then I just buy quality companies and hold.

[PaulRetiredEarly]

Ramin has talked a couple of times about QYLP recently. I understand how you "sell" the upside and take it as a dividend, but how does it make money if the market it trending downward?

[mikealex]

I would be interested in hearing your opinion on SVOL (US ETF). It seems to be a fund whose income is derived from volatility making profit no matter is market goes up or down...

[aliplayer]

Thank you for the knowledge, Ramin. Could you please share what software you use to create your charts? Is it just Excel, or do you use another more sophisticated program? @PensionCraft

[Madridstrat]

The stock market is definitely picking up pace right now, but I still think investors should be careful at this time. I'm actually a newbie in this space, so I'm open to hearing other investors' take on this.

[gianmariamalmesi]

When it looks too good to be true...

... it usually is.

[kygo]

Soooo, how long until we can invest in a bitcoin options trading fund? The premiums (and therefore dividends) on that would be huge due to it's high volatility right?! (but I guess also a very large downside risk...)

[elephantandcastle]

What is the probability of another black swan event for global bonds? I see VAGS is still nowhere near its high of Dec-20. So isn't rebalancing any stock/bond target futile? Why not just spend time determining how much money market you really need, and hold the rest in stocks, then keep rebalancing, the target amount needs being likely to change over a lifetime

[djpuplex]

If you backtest most options "strategies" they underperform buy and hold.