In short: A tactical trade only — daily rebalancing means "real decay," so "it's something you don't want to marry, you kind of want to rent." Renting VIXY for September and October "makes a lot of sense" with equity vol this cheap.
VIXY rises when the stock market's expected volatility — the "fear gauge" — jumps. It is portfolio insurance you can buy in a normal brokerage account.
Two things make it attractive right now: insurance is cheap relative to the risk (three "treacherous" inflation reports are coming), and a lot of investors are sitting on 16–18% gains for the year. His rule is to spend about 1% of those gains on protection.
But he is emphatic that this is a rental, not a marriage. Funds like this must reset their futures positions every single day, which quietly bleeds value over time — "there's a real decay." He frames it as a tactical trade for September and October specifically, then out.
5:32And remember when you buy an ETF that is short something, the portfolio manager has to rebalance that every day. So there's a real decay. So it's something you don't want to marry. You kind of want to rent. But renting something like that like the VIXY ETF for September and October, we think makes a lot of sense.
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