Q. I think the market is too high and I want to hedge my gains, what options should I consider?
A. You can consider 4 hedging strategies for your stock portfolios:
1. Hedge the Market
Buy ETFs that invests in derivatives and other financial instruments that have inverse returns of S&P 500 and Russell 2000. For example, Proshares Short S&P500 (SH) and Proshares Ultra-short Russell 2000 (TWM).
2. Buy Funds That Sell Short
Some funds invest in stocks that they believe will fall. For example, Grizzly Short (GRZZX).
3. Invest in Bonds
Bonds usually have very low or negative correlations with stocks, add bond funds to your investment portfolio. For example, Vanguard Core Bond (VCORX) and Fidelity Intermediate Bond (FTHRX).
4. Add Gold to Portfolio
Gold usually has no correlation with S&P 500. The easiest way is to buy Gold ETFs, for example IShares Gold Trust (IAU) and SPDR Gold Shares (GLD), or buy Gold Mining stocks, for example, Barrick Gold (GOLD).
A. You can consider 4 hedging strategies for your stock portfolios:
1. Hedge the Market
Buy ETFs that invests in derivatives and other financial instruments that have inverse returns of S&P 500 and Russell 2000. For example, Proshares Short S&P500 (SH) and Proshares Ultra-short Russell 2000 (TWM).
2. Buy Funds That Sell Short
Some funds invest in stocks that they believe will fall. For example, Grizzly Short (GRZZX).
3. Invest in Bonds
Bonds usually have very low or negative correlations with stocks, add bond funds to your investment portfolio. For example, Vanguard Core Bond (VCORX) and Fidelity Intermediate Bond (FTHRX).
4. Add Gold to Portfolio
Gold usually has no correlation with S&P 500. The easiest way is to buy Gold ETFs, for example IShares Gold Trust (IAU) and SPDR Gold Shares (GLD), or buy Gold Mining stocks, for example, Barrick Gold (GOLD).
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