1) Sell your stocks and go into cash which pays you 2-3% (and going down with each rate cut)
2) Buy insurance and keep the dividends on your stocks rolling in
I recommend high safe dividend paying stocks (VZ, GE, MO, MCD) that pay higher dividends then cash (money markets & high yield savings) and then buying ETFs that go up when the market goes down. This way you get your dividends and you protect you overall portfolio value.
See below:
DOG - is an ETF that goes up 1 for 1 as the Dow Jones Industrial Average (DJIA) goes down.
DXD - is an ETF that goes up 2 for 1 as the DJIA goes down.
I like DXD since you can buy it cheaper and get twice the protection. Keep in mind that if the market goes up then you lose twice as much though.
DOG
DXD
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