We’re in a Holding Pattern – And That’s OK

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Remember the movie Braveheart? There’s a scene where the Scottish are about to battle the English, and Mel Gibson’s William Wallace is telling his soldiers to “hold!”

His point was: Wait for the perfect moment to engage the English in battle. When both sides begin to set up for battle, it makes sense that someone might engage too early and blow it! By holding and picking the moment, the Scots were able to inflict the most damage on the English.

So, on that note… “Hold!”

As the market grinds – and, today, pauses – it’s all to easy to step out ahead and tip your hand early. The difference between this market and Braveheart is we don’t have a leader telling us when to step up for a shot at greatness.

This is where strategy is so important. It makes sense to keep powder dry as you await a better entry, but, on the other hand, staying out of the battle may lead us to being ill-prepared to fight when the time comes.

That’s why options are so important: You can use limited-risk strategies, pick whether to engage in a high- or low-probability move. Move in with limited risk, and you’re preparing for a bigger battle – with higher stakes.

So, again, let’s “hold” on committing piles of capital to a directional play and engage with defined-risk spreads, like these…

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