Hedging clients’ portfolios only after a stock market plunge is like shopping for seat belts after a crash.
That’s the subheading of my column in ThinkAdvisor. An excerpt:
The recent stock market decline reminds us that risk happens fast. Bond values also dropped, meaning there was no diversification benefit between stocks and bonds, which further rattled investors’ nerves.
With the sudden resurgence in volatility, there has been, not surprisingly, a newfound interest in strategies that strive to hedge a portfolio against downside risk. These are known as absolute return strategies.
See Navigating Volatility: 3 Strategies I’m Using Now in ThinkAdvisor.