A completely risk-free investment is pretty much a unicorn. Even cash in the bank loses value over time as inflation rises. Hedging is a word obnoxious trader types use to describe investment strategies aimed at protecting your portfolio from losing money. Traders mostly hedge using derivative products, but I steer clear of the d-word as much as I can. Does that mean I can’t protect my portfolio from risk?
In this episode of The Fat Wallet Show, Simon and I try to figure out if there’s a space for hedging for a boring long-term index investor like me. Spoiler alert: There is.
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