Investing

Best Hedging strategy for stocks right now

  • Last Updated:
  • Feb 10th, 2021 10:23 am
[OP]
Member
Jan 9, 2016
218 posts
166 upvotes
Oakville, ON

Best Hedging strategy for stocks right now

With the markets at all time highs I am increasingly getting nervous and would like to protect my gains in case it rolls over. Since like most people I cant time the market so was thinking of adding some hedges in the portfolio. In the past I have tried the following unsuccessfully:
- HUV.TO and TVIXF
- Putting a portion into cash - In April 2019 I went 30% cash only to re-enter the market again in december, missed out on gains.
- Increasing gold weightage in portfolio.

Any better suggestions or comments on these? What kind of hedging strategy do you use to protect your capital especially right now? Also I don't use options or short, just never educated myself about it as it felt complex and risky. Is that the best way to go?

Again, with sp500 already 4.5% YTD and on pace for 52% year I need some more insurance.

Thanks
5 replies
Deal Expert
User avatar
Dec 12, 2009
28455 posts
19073 upvotes
My crystal ball is about as good as yours. I would suggest that if all the hedging in the past was unsuccessful, it is time to rethink the game plan. Think TINA.
All I want for Christmas is a Santa Claus rally. #Animal Spirits.
Deal Addict
Dec 10, 2007
2457 posts
203 upvotes
You can use put option as hedge on stocks that you own. With the Fed pumping trillions in QE it's hard for the market to stay down though.
[OP]
Member
Jan 9, 2016
218 posts
166 upvotes
Oakville, ON
spike1128 wrote: Buy bitcoin is ultimate hedge.
I doubt it can act as an hedge. I think it will go down as well like last year if things fall.

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