Traders, you never want to get caught with your pants down — literally… But especially in these markets. That’s why it’s important to know how to hedge your portfolio in 2021.
The past year and a half have been a wild one, and my imaginary crystal ball isn’t showing me what’s coming. All I know is that a week ago, the markets were at all-time highs and the VIX was almost reaching 17. Yes, you read that right… 17.
And when the markets look like that, hedging your portfolio is super cheap.
But that depends on what you think the markets are going to do. Because there are a couple of different protection strategies you can look into.
And like I said, that crystal ball that I don’t have? It’s not showing much. Should we be bearish? Is the market going to correct? I don’t know. It could pull back a little…
But the trend is bullish and, as you know, you never want to fight the trend.
Normally, I’d say you could buy gold or silver to hedge your portfolio in 2021. But as we all know, normal correlation doesn’t exist anymore. Luckily, there are plenty of other options.
On the one hand, you could buy puts and the VIX and hope that the market crashes…
Because remember, if you buy the VIX, you want volatility to spike. And if you buy puts, you’re hoping the stocks crash.
But here’s something I’m doing…
I’m buying bonds. Specifically, the iShares 20-Plus Year Treasury Bond ETF (Nasdaq: TLT). Exciting, I know…
But it’s been holding up pretty well and looking like it wants to break out.
Now keep in mind, the TLT doesn’t move a lot. But if it moves 0.5% or 1% a day, calls are going to pay off nicely. And even while the markets did pretty much nothing a week ago, the TLT was rising.
So not only am I hedging my portfolio in 2021, I’m still earning!
Now if I had bought puts or the VIX, like I mentioned above… I’d be losing money right now.
But that’s just one of your choices. For more strategies and stocks to hedge your portfolio in 2021, check out my short video below.
And make sure to subscribe to our YouTube channel and click that bell so you can always be up to date on our latest videos.
P.S. WealthPress Senior is tired of pouring over report after report of data… OK, maybe not, but that isn’t how everyone likes to spend their time.
All that research paid off for Roger, however, when he made this discovery.
A discovery so powerful that in 27 years of trading, he’s never seen anything like it.
And now he wants to share it with traders that are tired of owning stocks that are going nowhere, when they could be on vacation instead. And all they have to watch…