Hedging long in a recession?

Discussion in 'Trading' started by Cuddles, Apr 7, 2018.

  1. Cuddles

    Cuddles

    I'm planning on making some moves in my 401k towards safer, recession resistant sectors/markets. In your experience, what has worked in the past? Think 80's and post '09.
     
  2. Handle123

    Handle123

    Trend is your friend and hedge it.
     
  3. comagnum

    comagnum

    Every bear market is different. Just keep an eye out for what has relative strength in relation to the market.

    upload_2018-4-7_14-52-26.png
     
    Last edited: Apr 7, 2018
    Cuddles likes this.
  4. A fundamental theme in a severe economic downturn is “disintermediation”. People will tend to do more things for themselves. Auto parts and education type industries tend to do well.

    Imagine your own situation where you lose your primary source of income. Look at or create a budget. What items would you cut back and what could you learn to do yourself? Then ask what businesses are positioned to benefit from people like you making the same decisions that you would be likely to make. The answer to that question is likely to be a good hedge.
     
  5. tomorton

    tomorton

    Cash is the most dependable hedge. But I would recommend the 100% rule - either 100% long when stocks are moving upwards, or 100% in cash when they're not.

    (Like a lot of us, I also own my own property which is inherently a hedge against stock market volatility, though that's not why I bought it.)