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I think these funds are useful as a risk hedge — there is some non-zero risk every year that the economy will collapse. If you invest in a fund that will help o
by exelius 9y ago
I think these funds are useful as a risk hedge — there is some non-zero risk every year that the economy will collapse. If you invest in a fund that will help offset some of that risk by performing above average in a downturn, you might want to do it as part of a portfolio strategy.
Nobody should be putting their life savings into one of these. Hedge funds like this aren’t for that; they’re a risk management lever that gets set according to the economic model an investor is using.
- junkscience2017 9y agolots of people here keep using the term "hedge"...none of the permabears market these as hedge funds...they do not internally hedge their own risk positions these are what they appear to be - bear market funds
- oarsinsync 9y agoGiving a bear market fund a % of your total investment capital is the hedge. They don't need to be hedging their positions, you've already done that on the macro level by diversifying your investment portfolio.