I’m continuing to hedge against an economic downturn

Without going into politics to the greatest extent possible, there seem to be a number of economic headwinds coming this year. Inflation is persisting, and rates are looking less likely to get cut. A number of major employers have went through rounds of layoffs. Tariffs threaten to increase prices and compress margins further. And war in the Middle East looks to be picking up steam instead of winding down.

Between how hot the market has been and all of the volatility that appears ahead, I’ve continued my strategy of pruning investments and selling covered calls on select positions. Today I sold a covered call on VOO with a strike of $615 and expiration of 01/26. My VOO is up 20% in less than a year and getting to the strike would be an additional 10% gain.

I’m not suggesting this is the right move for everyone, but as I weigh my risk tolerance against my uncertainty in the market stability and U.S. economy, I feel more comfortable repositioning and reducing some of my exposure.

Wanted to put that out there and get responses from the community on what you expect for 2025 and how you’re positioning.

Edit: to clear up some repeating comments

If you are reading politics into this post, that is 100% on you. We’re here to talk about the market, so be mature and try to do just that

I do not think I’m Michael Burry. I’m not trying to beat the market, or time the market. I am actually trying to remove any element of timing by ensuring I am liquid enough to last through worst case scenario without touching my portfolio should the market take a big hit.

I’m in a position where I don’t have to touch my taxable brokerage. To ensure I can keep it that way should serious economic downturn hit, I have locked in profits to build my cash position. I’ve done this both by selling certain profitable positions and by selling CCs on profitable positions. The point of selling CCs is to lock in profit, nothing more. Yes this caps upside. That is ok

No matter what the market does, I continue contributing to my retirement accounts. If the market keeps running, good for my retirement. If it crashes, I’m prepared. This is how I handle my risk tolerance, by balancing what I leave in equities with what I have in cash

Edit 2: I’m happy to see different opinions and value everyone expressing their strategies and what they think makes sense for their portfolios. It’s why I post here. But some of you get really emotional in these comments. We can be adults and discuss different opinions without getting upset or resorting to childish name calling. Emotions in investing is a bad look