Hedging is a useful practice that every investor should know about.
It’s a way to protect your portfolio, and protection is often just as important as portfolio appreciation. Even if you are a beginner, you can learn what hedging is and put it to work for you.
The best way to understand hedging is to think of it as a form of insurance. When people decide to hedge, they are insuring themselves against a negative event to their finances. This doesn’t prevent all negative events from happening, but when something does happen and you’re properly hedged, the impact of the event is reduced.
In practice, hedging occurs almost everywhere, and we see it every day. For example, if you buy homeowner’s insurance, you are hedging yourself against fires, break-ins, or other unforeseen disasters.
Risk is an inherent part of investing. Regardless of what kind of investor one aims to be, having a basic knowledge of hedging strategies will lead to better awareness of how investors can protect themselves.
While typically the goal of hedging is to protect from losses rather than to make money, with Trend Technical Trader (TTT) we take it one step further. Cycles will always occur, and we seek to profit greatly from those cycles.
TTT is a hedging service that is designed to profit during stock market declines, and the bigger the decline, the bigger the gains TTT trades can generate. Our objective is to help serious investors avoid losing a significant portion of their wealth in the next downturn and position them for the next big buying opportunity.
It is also possible to make a lot of money during a market downturn, not just mitigate losing money. It’s even possible to have typical long positions that stay flat or go higher when markets collapse, if they’re properly and prudently chosen.
Trend Technical Trader is not just for hedging, or seeking to profit when markets plunge. We’ve made phenomenal gains when it was prudent to be bullish – in stocks, gold, oil, currencies… whatever is compelling at the time. In fact, our proprietary Gold Timing Indicator (GTI) has a record better than any other we’ve seen.
Why is timing so important? Those who rely on “fundamentals” are ignoring history, unaware of how creative corporate accounting often is, and at best basing their valuations on quarterly-reported numbers and metrics that are already months old. We believe a timing element is essential to successful speculating and investing over time, so while we consider fundamentals, we also heavily factor technical and sentiment measures.
Our ideas can also be an effective tax strategy. Clearly it was prudent to sell stocks or hedge a few weeks ago, and we said so to our subscribers in no uncertain terms. Is it right from a tax perspective to sell all or part of perhaps dozens of holdings? What about dividends? It may be best to adopt only a single position to protect that broad portfolio, triggering just one or two taxable events when that position is closed, and in the meantime dividends will still accrue.
Our timing measures are also of great use to those who have their own investment ideas, or get their stock picks from other advisories. We have up-to-date timing indicators that help investors to decide when is the most opportune time to buy or sell.
Please view a free recent copy of our publication. It may be exactly what you need going forward, because market turmoil will not end when the virus scare passes. It’s been decades since there was a legitimate bear market – one that didn’t skyrocket to new all-time highs and far beyond within a couple of years. Some may wish to believe that it can’t happen again, but as last week has irrefutably shown; history repeats.
To view a free sample of Trend Technical Trader click here.
