There at theOptionsEdge.Com, we focus on active management of our investments. We take bullish positions in companies that we think are undervalued (i.e. trade below intrinsic value) due to some short-term issue that drives negative sentiment toward the company's stock where the technical indicators and price action show the share price is beginning a rebound. Shares do not necessarily have to be depressed, we are also like undervalued stocks that are simply trending higher. We are happy to jump on the trend train. At the same time, we want balance in our portfolio to help manage market risk. To do this we take bearish positions in companies that we think are overvalued (i.e. trade well above intrinsic value) due to investor exuberance that drives excess exuberance toward the company's stock. Timing is key in these situations so we wait for the technical indicators show the share price is beginning to slump before diving in.
We also recognize that any good investor has their passive puy & hold portfolio where they own index funds or simply hold value stocks for the very long-term. Dividends play an important role in that portion of one's portfolio.
