Ali Velshi for CNN Money: You can hedge, but you can't hide

December 7th, 2011

CNN Money
December 7, 2011
By, Ali Velshi

(MONEY Magazine) — Stock market history and the prospects for global growth suggest to me that we aren’t lurching toward another long bear market.

Polls and my e-mail in-box, however, show that plenty of you fail to share my enthusiasm. That’s made me want to look at what’s available to retail investors who are willing to sacrifice some of the upside stocks offer in exchange for not having to endure all their gut-wrenching downside.

After all, you’re more likely to ride out a volatile market if your investments are, well, less volatile; it’s the whipsawing that tends to throw people from their seats.

The past 15 years have seen a proliferation of mutual funds offering hedging strategies to limit losses and moderate swings. MONEY editors aren’t fans, citing high fees and uneven success. But if you’re nervous about where stock prices are, I believe these types of funds can make sense.

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