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Old 09-17-2017, 01:43 PM   #1 (permalink)
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Hedge recommendations?

So, I'm a bit wary of the current bull market, and between the behavior of the housing market and the length of the current upward run, I want to hedge my fledgling portfolio with a proper hedge fund, as opposed to a "hedge" that's really just another speculative fund. Something like Artemis Capital, where, if the market tanks, it pays out to offset losses in other sectors. I'm thinking "Big Short" type scenario. (I understand people have varying opinions on the overall direction and stability of the market... Please let's start on topic for what is available for what I want, as opposed to whether it's a valid concern.)

Problem is, I'm working with thousands, not tens or hundreds of thousands. Anyone know of an ETF lined up to counteract strong downward moves? I'm partial to Vanguard and Schwab, due to their management fees, but our 401k is through Trans America with a lot of vanguard options available.

Thanks!
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Old 09-18-2017, 09:29 AM   #2 (permalink)
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The best and only true way to hedge is to options trade.

You buy a "put" on the SPY ETF, enough to cover your portfolio. If the market tanks, you'll only loose a little money. If the market stays even, you lose the most. If the market goes up, you have the gains in your regular account that makes up for the few hundred dollars you used on the put.

If you're only talking thousands and not hundreds of thousands, you're better off just dumping into cash until you feel better, but usually that never works as people tend to always do the opposite. The wait for the market to go down, it goes down far enough, they dump into cash and won't get back into the market until it's gone up high enough so they missed out on all those gains.

Another suggestion:

RYURX, RYTPX, PSSAX: Mutual Funds to Short the S&P 500 | Investopedia

You purchase a mutual fund that is basically betting that the S&P will go down. The market goes down, you make money.

I've had good luck and bad betting. Because it is just betting.

Yes, it's all high, and it all hinges on tax reform right now I feel. Tax reform = good market. No tax reform, she will tank.
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Old 09-18-2017, 09:54 AM   #3 (permalink)
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privet would be a good choice
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Old 09-20-2017, 08:20 PM   #4 (permalink)
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Interesting options. Thanks guys.

And by that, I mean painthappy. I'm not so good at keeping green stuff alive so the privet would be worthless.
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Old 09-20-2017, 08:23 PM   #5 (permalink)
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Land, my land investments over the long run have appreciated better then any other investment and you have something "concrete".
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