STREET DOGS: A tonic for your nerves
Three ways to protect yourself from that rare but inevitable event
From The Reformed Broker, Joshua Brown: You know what’s easier than paying an arm or a leg for the type of insurance that murders you most of the time? How about just having less exposure to the assets you’re nervous about? How about having less to hedge instead of worrying about doing more hedging? If your big theory is how stocks are overvalued relative to some historic relationship that may or may not be relevant anymore, then you invalidate it by being equally bearish at Dow 8,000 as you are at Dow 24,000. What needs to happen to have you want to be invested in stocks — an alien invasion? Permabear funds and black-swan funds have their place in a portfolio, as long as that portfolio is not mine or that of anyone I care about. So what’s the answer? I’ll give it to you as plainly as possible: First – the best way to protect yourself from the historically rare yet inevitable market crashes that show up from time to time is to have the appropriate amount of money invested in the fir...
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