For Heaven’s Sake: Hedge!
By
Q: How do you make a small fortune on Wall Street?
A: Start with a large fortune.
~ old investing adage
If you’re not positioned defensively by now, you’re nuts
Last fall, I wrote an article titled Defying Gravity that warned of the absurd price levels that stocks and bonds had risen to.
The piece first looked at the unbroken multi-year march upward in prices through the myriad money-printing cycles of the world’s central banks, as well as the near-extinction of bearish investors on Wall Street — which it then contrasted with the vast gap between valuations and the underlying weak economic data, deteriorating chart technicals, and evidence that the “smart money” was exiting the market. The takeaway? Prudence strongly recommended moving to cash and hedging one’s open market positions…
