Hedging

Prior to the last buy cycle coming to an end, I have addressed the fact that we have held on to two of our domestic mutual fund positions and hedged them against further downturns rather than selling them. Reader Tom had this comment:

Thanks to you, I have been sitting comfortably on the sidelines after I lost my initial 7% when the downslide first started. I also decided to sit out your most recent buy signal based upon the dire predictions of some of the references you had been quoting.

Lately your newsletter/blog has several references on hedge and short positions. Can you recommend a particular website or publication where those of us with limited knowledge of these strategies can come up to speed?

I certainly respect your advice as my portfolio took a drubbing in the 2001-2003 declines, but I managed a wry smile today when the market dipped 20% below the October 07 high.

If you search Google on the topic of hedging, you’ll find millions of answers. Most of them may not be worthwhile for you and some involve incredibly complicated computations. I think that the majority of these offerings are not for the every day investor.

I have not found a site which addresses simple hedging strategies that any investor can use along with his mutual funds and ETFs. So I designed my own. I have done some extensive research and testing with impressive results. My plan is to put these findings in an e-booklet of maybe some 20 pages and distribute it for free.

Before you ask when that will be available, I am not sure yet. Time always gets the better of me, but I hope to get something done within the next 60 days. Once I have something definitive, I’ll make the announcement on this blog and in the weekly update.

About Ulli Niemann

Ulli Niemann is the publisher of "The ETF Bully" and is a Registered Investment Advisor. Learn more
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