≈ 300 years of protection. ≈
If you could build a system that protects your investments for 300 years, what would it be like?
HEDGE is one of the most important topics you can learn as a trader/investor.
If building wealth is already a hard task on itself and usually takes a whole life to be accomplished, imagine protecting it. It’s even worse. The Bank of New York (NYSE: BK), the oldest company traded in the NYSE, was founded in 1784 by Alexander Hamilton, a founding father of America. Imagine the mighty effort to protect it for the last 234 years.
Although the “300 years” sounds a very stimulating topic for a long conversation accompanied by a good wine, let’s focus in the present moment: your investments today.
— How would you hedge your investments against currency devaluation?
— How would you use your investments to hedge future projects, such as sending your kids to study in England, for example?
— How would you hedge against dishonest people?
— What if they shut down the market for the next 10 years?
— What if you die?
Our suggestion is that you start small, thinking about hedging a single position. Then you amplify your studies to a group of positions (could be a system) and then to your entire portfolio. Then you extrapolate to external factors such as currency devaluation, crooked people, and inflation. Then you start to think of extreme events like market shutdown and your own death.
A little bit of paranoia will go a long way in helping you hedging your investments.
Chart of the Day: Sorry, no chart today.
This is a 300-year old yew hedge, which sits on the Bathurst Estate in the Cotswolds, England.
What if your investments look like this 300 years from now?
