Even with alternative investments and other portfolio hedging techniques, bonds are a traditional asset class that can play a useful role in diversifying a portfolio and mitigating risk in any market environment.
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Because they are cheap to own and trade, they make for a fairly good, simple alternative for portfolio hedging.
Traders were using a new kind of hedging strategy called portfolio insurance, which involved linking stock prices to the futures index.
The British bank has prepared a list of global currency reaction to a continued euro slide, suggesting the U.S. dollar, the Japanese Yen (JPY), and gold remain the most attractive portfolio hedging options, while other emerging market currencies provide interesting trading prospects.
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They have made functional such techniques as portfolio diversification, hedging, structured finance, and credit scoring, all of which greatly reduce the riskiness of promises to repay.
He holds another patent on a risk-reduced portfolio that would combine stock investments with portfolio insurance and such hedging techniques as collars.
The third planned actively managed ETF will be an all equity portfolio strategy that employs option hedging techniques.
Since first disclosing the loss, Dimon has largely pinned the blame on a hedging strategy gone wrong, a synthetic credit portfolio initially intended to protect the company that became a successful position and blinded those who were in charge of managing it to the rising threat it posed.
So hedging your fixed-income investments in the fixed-income portion of your portfolio is going to be very critical.
Stack does agree that "the dollar is in trouble" and that it would make sense to hedge your portfolio against further declines by allocating 5% to 12% to gold and other "dollar-hedging" assets.
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