4 Reasons That Defense Might Be Your Best Offense


It might have been at a football game or a basketball tournament where you first heard this concept (and most often since): a good defense is often the best offense. And since investments employ much of the same game theory as the competitive sports contests we love to play and watch, it makes a lot of sense that defense can often be your best offense when it comes to trading stocks and options as well.


Here are four reasons that defense can become your best offense in trading.

1. It’s less popular

Social media sites like Facebook and Twitter have fostered a new, hyper-fast craving to compete for popularity online. This most certainly bleeds into investments: people enjoy talking about making a huge return on a stock that’s popular and rising, as opposed to telling everyone they made money on the market crashing.

They probably avoid the latter because most people lost money and might blame you as the reason their investments disappeared. Anything that’s less popular holds opportunity.

2. It’s hard to make up losses

If you have significant gains that get wiped out by an even greater loss, your path back to earning those profits again tends to be a much longer one. If you can lock in your profits near the peak of their earnings, and select defensive investments before the markets crash, you’ll have an exponentially higher return by avoiding that losses that result from being too aggressive.

3. You’ll feel better

The stressful parts of investing can be mitigated by employing some defensive strategies to reduce the risk of investing money. Knowing that a loss is possible will always be a concern, but if you can set up an investment to limit the range of money you can lose (like a put-call hedge), then you’ll tend to be a lot less nervous about the investments you’ve made, and be able to relax and enjoy the ride from there!

4. Because it’s starting to become more common to talk about

There are a lot more resources out there now, that tell you how to make defensive investment plays during peacetime on popular stocks and options such as Facebook and others.

Now that people are starting to understand that money can be made (and profits protected) by defensive trading strategies, they’re flocking to resources online (and creating them) to help other investors understand those methods, for better or worse!

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James is a financial expert who has contributed several business and finance related articles. His expertise and first-hand knowledge of economics makes his blogs and articles informative and helpful for those looking out for guidance and assistance in matters related to finance. He has an active schedule of TV and radio interviews He is co-host of the popular VT Radio show Jim and Gordie Show. latest-articles-buttonJim comes from an old military family dating back to the American Revolution. Dozens of Confederate ancestors fought for the South in the War Between the States. Uncles fought in WWII and Korea. His father was a WWII P-40 and later P-51 Mustang fighter pilot. Vietnam found several uncles serving, a cousin, and brother Wendell as a young Ranger officer. His mother was a WWII widow at 16, her first husband killed with all 580 aboard when the SS Paul Hamilton, an ammunition ship with 7000 tons of explosives aboard, was torpedoed off the coast of Algiers. He has been writing, speaking and doing public relations, television, consulting and now multimedia work for a variety of American heritage, historical, military, veterans and Intel platforms. Jim’s only film appearance was in the PBS Looking for Lincoln documentary with Prof. Henry Lewis Gates, and he has guest lectured at the Army Command and General Staff School at Fort Gordon. Currently he is working to take his extensive historical video archives on line to assist his affiliated organizations with their website multimedia efforts, such as the Military Order of World Wars, Atlanta, Sons of the American Revolution, Sons of Confederate Veterans , Assoc. for Intelligence Officers, the Navy League, Georgia Heritage Council, National Memorial Assoc.of Georgia.

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