4 ms·
Bond's are a great hedge, until they are not. With the policy stimulation starting with printed money to buy domestic assets, and moving rapidly towards printe
by thedudeabides5 7y ago
Bond's are a great hedge, until they are not.
With the policy stimulation starting with printed money to buy domestic assets, and moving rapidly towards printed money to finance fiscal support, it's not clear that bonds everywhere are a good hedge.
https://www.tradingview.com/symbols/TVC-IT10Y/ https://www.tradingview.com/symbols/TVC-IT10Y/
Gold on the other hand, has been a decent hedge universally for a couple thousand years.
- short_sells_poo 7y agoGold is a crap hedge for equity selloffs. It's correlation is highly dubious and as in 2008, in this current case as well it actually sold off sharply with the equities. Bonds are very much like gold in this respect, doubly so if you explicitly pick the bonds of a highly indebted country with a shaky economy, in the middle of a potentially massive pandemic - like Italy. Italian bonds as a hedge have been avoided like the plague by anyone with an ounce of insight.
- thedudeabides5 7y agoDepends on your currency! IF you are an American, it's an okay hedge. If you are European or Asian, it's pretty good. Problem is, you are thinking about your gold against dollars. Against yen, euro, rmb, it a natural hedge for your implicit short dollars.