Dow 20,000 and Damn the Hedges

America has gone bonkers for ‘hedges’ and leveraged ETF’s.

I think you can avoid both and be a great trader and investor.

I have lost a small fortune ‘hedging’ over the course of my 51 plus years. That’s capital, not including time and mental anguish.

I wish I had never heard the term.

If you are starting out investing today and you think you must hedge, cash is fine. If you are headed down a career path where you need to understand hedges or hedging…run.

Diversification on the other hand is not a bad word. The problem is we over diversify. Hedges are part of that over diversification.

The old fart Warren Buffett likes to say ‘be fearful when others are greedy and greedy when others are fearful’. I would add just be careful what kind of asset or market you apply that statement too.

Right now CNBC has a special on about Dow 20,000. It’s what they do. They chase ratings which always makes them look like they are chasing the market. Dow 20,000 is just a number in a long line of numbers.

A better time to buy is when CNBC is running their ‘markets in turmoil’ specials.

Serenity now.


Also published on Medium.