Using Hedging Techniques

Hedging involves taking an investment position intended to offset potential losses or gains that may be incurred by a companion investment.

It provides a form of insurance for an investment portfolio. 미세먼지 관련주

Options and Futures

Options and futures can be used to hedge against a downturn in the stock market.

For example, buying put options on stocks you own can protect against potential losses if the stock price falls dramatically.

Strategic Asset Allocation

This involves adjusting the mix of assets in a portfolio according to market conditions and one’s risk tolerance and investment goals. Rebalancing the portfolio periodically to maintain the original or desired level of asset allocation can also hedge against market volatility.

Risk Assessment and Tolerance

Understanding one’s risk tolerance—the degree of variability in investment returns that an investor is willing to withstand—is critical in risk management. This understanding guides the choice of investments and the overall risk management strategy.