An Election-Proof Strategy

Today everyone will be talking about the fast-approaching U.S. presidential election, and which sectors will do well under the various potential scenarios. As natural contrarian, I have no intention of doing that, as I believe it is a futile exercise. Under any scenario we'll have a government with sharp divides along party lines, and nothing much stands to actually be accomplished. Making bets on the unknowable is not my style, so I will try to focus on things that might make us some money regardless of occurs in Washington over the next few months.

I want to start the week by evaluating my hedged model portfolios. I started out this spring looking at different ways to hedge a portfolio of stocks using the S&P 500 Index and its components. Since then, two strategies have thus far proven to be winners. A few others have made into the round file as being totally ridiculous assumptions with seemingly no merit or potential. So far we only have about a half a year's observation, so this needs more testing and observation -- and the market has generally been rising, as well, so we don't know how well the hedge will work in a price collapse. Still, the results so far have been interesting....420 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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