In high yield investing, recognizing market mania—characterized by excessive optimism, algorithm-driven trading, and speculative bubbles—is crucial for risk management; effective hedging strategies include maintaining market-neutral positions, using gold as a risk-off asset to hedge equities, and dollar-cost averaging into positions while managing emotions to avoid FOMO and fear-driven decisions.
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Deep Dive
Cash Flow Life! The Week AheadAdded:
Hey, what's going on everybody? Welcome to Bonafide Investing. We talk all things high yield investing, options, as well as investment ideas and goals.
If you're new to the channel, welcome.
The channel's been going here almost 6 months.
I have been experimenting with high yield strategies for over 2 years now.
And what I've done is I built a all-weather high yield portfolio that I call Cash for Life here, that seeks to number one, pay my bills, and number two, maintain and pay down my margin over time.
Everything we discuss here is not investment advice, not now, not ever.
Please do your own due diligence and research before making any of your own investment decisions.
Even though I was once a financial advisor at one point, I'm not responsible for your wins. I'm not responsible for your losses.
This is not the only way I invest. This is not the only way I suggest anybody invests. And the sole purpose of this account is to pay my bills, no money going in, only money coming out for bills, and it using the distributions along the way.
Hope you guys all had a really good Memorial Day weekend. Weekends just fly by. We're getting almost close to 2026 being half over here. We've got one more month, basically. So, what I want to talk about today was the week ahead, some of my thoughts around the week ahead. I will be making another portfolio update on Saturday. I'm going to try to make one or two more videos educational base this week as well.
Please comment. Love to hear your thoughts and comments on if there's any topics you want to hear more about.
And if there's anything I can do that I haven't already done, or more in-depth on something we've discussed, please like and subscribe. Please help support the channel.
Share it with others who you feel might benefit from this content as well.
So, over the weekend, again, no surprise from the administration, we got a peace deal is near.
I'll tell you what, if I was this administration, I would just say that each and every week to keep these markets propped up, to keep driving oil down. It just shows you what a headline driven market this is.
And the reason that's concerning is it just shows you the algorithms are in a lot a lot of ways in charge.
Okay, so sure there's human interaction on these market movements, but there is a lot more tech. And good news usually means up for markets, and I think that's a really dangerous thing over the long run.
Had a really good comment had a bunch of good comments actually. I wanted to discuss one where you know, there are high yield channels out there who are long only. Yeah, it's it's really interesting how this space is really an all-or-nothing mindset and I don't know, teach their own I guess at the end of the day.
How would I describe these markets?
Pure mania. This is just pure mania.
We're going to think we're getting really close to a blow off top.
However, manias can go on for a long time. Even in 1999, people were talking about a mania and it still took about a year for that market to have a blow off top in in the dot-com bubble.
So we might see this same thing now.
Markets might collapse tomorrow. Nobody knows. There's no Nobody knows when what markets will do. So I stay hedged irregardless.
I take a lot of market neutral stances.
But I would describe this market as a mania.
And if I assist administration, I would just keep saying, "Yeah, we're close to a deal, close to a deal." At least till November. You might as well, okay?
Because markets just hang on every single word this administration says.
Liquidity.
I really think there's a lot more liquidity being pumped into the system than than we know about. I think that if the Fed and the government stop printing money, the whole system collapses. We have egregious debts, corporate debts, federal debts, a lot of that debt being rolled over in 2026 at a much higher interest rates. That's not a good thing.
So when you have rates moving with oil, one thing I'd like to see today was that gold is moving inverse of the markets.
Last I looked, markets were up to open the day. You have the S&P up about.7, the Nasdaq up over 1%.
Bitcoin's up. So, Bitcoin typically does move with the Nasdaq.
It's interesting, gold and silver are down. Gold has been trading like a risk asset. I like to see gold move opposite of equity markets.
At the end of the day, that really is gold. Gold is to hedge equities.
So, again, seeing that seeing that, you know, gold is I think doing its role. And again, it's one day, and it's only been a couple days of the past couple of few months.
Hoping that trend will continue. And what I think we'll probably see now is equity markets just this bubble get blown bigger.
Everybody looking like geniuses.
And then gold and silver falling. And then I think that will shift when the markets do eventually roll over at some point. I don't know if that's this week. I don't know if that's 5 years from now. I'm not going to put a date on it.
You guys know I'm a bad market timer, especially long-time watchers. So, again, I I thought these markets would have collapsed a long time ago. They have not. I stand corrected. It's okay, you just adjust as you go.
If markets do keep melting up into June, I will probably increase my YQQQ position a little bit.
YQQQ looks very tempting under $10 a share. I have sold the June 18th $9 puts. I sold 10 contracts. I don't mind picking up 1,000 shares at $9 if we were to rally that hard between now and June 18th.
Yeah, I'd be really excited to pick up another 1,000 shares at that price.
I may buy a few more shares under 10. I might add just a little bit.
You know, I really don't want to load up on QLDY even at all-time highs. I still think this market will probably run higher this week. I think this market might even run higher for the next few weeks, month.
The biggest thing is the semiconductors.
That is clearly a bubble. I mean, you don't even have to analyze at this point. And what's really getting scary is these analysts coming out putting price targets that are just so outrageous.
Nvidia at $500 a share.
I mean, more than doubling from here.
You've got I saw one on Micron at $1,500 from some analysts.
That That's double from here. And these these equities have already had huge runs over the past year, 5 years, whichever company you're talking about.
So, a lot of times historically what that means is that markets institutions want to blow these markets up even higher so they can use retail as excellent liquidity, which I think is a huge possibility at this point.
Yeah, if these markets go up another 10, 20, 30% and I go up five, awesome. I will sleep well at night. That's fine with me. Cuz when these markets do roll over, and they will at some point, I want to hedge that downside. I want to outperform on the downside as I'm dollar cost averaging back into much lower prices.
Oil interest rates are moving in lockstep. So, bonds are up when oil's down.
Equities are moving in lockstep with bonds right now. That's typically not a big fan of that either. I usually like bonds to move with gold as they're both considered risk-off assets, more safe haven plays. So, I like to see bonds kind of start moving with gold. So, if gold's down, bonds are down, which means rates are up, and then equities would be up as well. So, we'll see. We'll see if these markets normalize, but I made a video, check it out about a week ago when everything becomes a risk asset, I get very nervous. So, some of my thoughts there. I think this week is going to be very anticlimactic.
I think you'll If you see any movement, it's going to be around any Iran headlines as it has been. Very news driven market, very unhealthy, frothy market.
What I did today, I dollar cost average back into this strategy double since we were closed yesterday.
I want to keep those numbers pretty equal across the week. So, I'm putting back in about $2,000 back in the strategy dollar cost average.
Buying that income, buying you know, salty, old tea, winter misty.
25 each day I did 50 to each today. Old team salty 50 into each every day. I did 100 into each every day. And then my core WDTE all the way through IWYRI. $250 per day.
I did $500 already. Well, I did 250 and then I have it set up where another 250 will come out.
Usually they Robinhood does it about halfway through the market day.
So, again, using that margin, I'm going to talk about using margin as an emergency fund this week. I want to make a video on that and I want to make another video just on some some Bible verses that I use in my investing and what's helped me over the years kind of stay in check and try to control greed, try to control my emotions the best I can when it comes to investing cuz I it doesn't matter who you are. You could be a seasoned investor of 30, 40, 50 years on Wall Street. You could be new.
Our emotions do get the best of us when we're seeing everybody FOMO and pig out and do well.
Yeah, emotions get the best of us. When we see everybody getting hammered and we get fearful, our emotions get the best of us. So, I want to talk a little bit about that.
I think it's just a good reminder that at the end of the day you know, your your emotional IQ usually moves opposite of your investing IQ. So, that's something we want to keep in in mind.
We'll talk more about that in some videos this week. So, love to hear your thoughts and comments.
Please like and share and please subscribe to the channel. Trying to reach more audience. I'm going to be starting some memberships soon.
Different tiers.
I want to start opening up to doing a little advising again for any viewers who want to take advantage of portfolio reviews, one-on-one meetings each and every month via via Zoom via via FaceTime, whatever that might look like. Still working out the details.
And then just getting some some access to some other things that I'll be doing as well. So Thank you guys for the feedback. You make this so fun. Have a great day.
And hope you got something from today's video.
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