It isn't bad advice to hedge your position with options, although doing it short term as suggested here is an active trading strategy and inherently more risky.
Contrary to popular belief that options = gambling, this is the #1 real utility of them. If 90% of your investments are tied up in S&P 500, it makes sense to hedge that with put options which provide a clearly defined max-loss over the contract duration of the option.
So in a period like this when those put options become valuable due to price drop and general IV, you can do as suggested and sell them to re-coup losses and maintain capital. It doesn't change the lifetime performance of your money placed in the corresponding security, but it most certainly improves the performance of your portfolio as a whole and limits the damage that can be done in any given downturn.
If you only hold securities, index or otherwise, your only recourse is time. I certainly wouldn't recommend trying to time the market, just like I wouldn't buy an insurance policy the day before a loss. That doesn't mean you avoid insurance altogether because you can't predict when you'll need it.
Contrary to popular belief that options = gambling, this is the #1 real utility of them. If 90% of your investments are tied up in S&P 500, it makes sense to hedge that with put options which provide a clearly defined max-loss over the contract duration of the option.
So in a period like this when those put options become valuable due to price drop and general IV, you can do as suggested and sell them to re-coup losses and maintain capital. It doesn't change the lifetime performance of your money placed in the corresponding security, but it most certainly improves the performance of your portfolio as a whole and limits the damage that can be done in any given downturn.
If you only hold securities, index or otherwise, your only recourse is time. I certainly wouldn't recommend trying to time the market, just like I wouldn't buy an insurance policy the day before a loss. That doesn't mean you avoid insurance altogether because you can't predict when you'll need it.