Wednesday, February 29, 2012

5 Simple Hedge Strategies for Volatile Times - Forbes

5 Simple Hedge Strategies for Volatile Times - Forbes

I am not convinced these are really "strategies", but more ideas of things you should give some attention. For example market volatility, credit risks, risk of low returns, inflation. Not so much a "how to" article, but more of a useful reminder of the various risks investors face. :

A rather long "look-in":
"Dawal encourages a portfolio that is well-diversified, well-managed and built to weather such volatility. They key is to have assets that are not correlated over an extended period of time.

He sees a diversified portfolio as one that includes cash, bonds and “equities of all ilk.....”

“We would also recommend real assets, commodities, real estate, infrastructure, perhaps timber, managed futures, private equity and traditional alternatives,” he adds....

In the not-so-distant past, these strategies were out of reach for all but the most high-net-worth investors and institutions. Now many of those hedge fund-worthy strategies have been replicated for a more mainstream audience through mutual funds and ETFs."

1 comment:

Highgamma said...

Most of these strategies have a fairly high duration (in terms of interest rate sensitivity). Is that really a good idea in this environment?