Review: PROTECTING YOUR INVESTMENT
Rating: 4 out of 5
Date: 06 30, 2014
A portfolio is a long term investment, panicking when the market fluctuates can be costly & unnecessary since the market typically rebounds and continues to grow.  When there is a realistic expectation of market changes Hedging is a better approach to protecting your investment.  Hedging is making an investment to reduce the risk of adverse price movements in a security.  Ideally it reduces risk to nothing except the cost of the investment.  Diversification is one hedging strategy that can be built into your portfolio without incurring any costs.  Effective hedging can save you lots of money but consider positions carefully.  If the economy is really crashing consider other options like cashing out or moving into commodities.  James does a good job again with detail and examples but this time I felt like he tried to put in too much information and it made it a little difficult to read.