What does it mean to 'hedge' your portfolio?
In finance this is the practice of taking an opposite position in an asset you have invested into in order to protect you from the downside. Think of it as insurance.
Just like insurance you often have to pay a premium for the benefit of downside protection.
1. Gold
Physical asset
2. US Treasuries
Bonds, bills, T notes.
3. Real estate
Residential or commercial real estate rentals.
Parking garages.
Hotels.
Storage units.
4. Options
You can purchase a put option on the stocks you have purchased.
5. Different sources of revenue
Different businesses. Different jobs. Different real estate projects.
6. Artwork
Fashion
Rare valuables
Cars
Basically valuable physical items.
No comments.