Many people pay financial advisors to manage their portfolios, forking over exorbitant fees to a financial “guru” who promises to mix risk and reward according to your personal preferences. These people will invest some of your money in hedge funds to create their own mix of short and long positions that effectively do the same thing as a hedge fund.
Some of these financial advisors have great track records and will be happy to show you the gradual upward trend of their funds and portfolios. But guess what? Overlay an S&P 500 chart for the same period and you’ll probably see a very similar upward trend. When the market us going up across the board, you have a good change of picking stocks that will follow the trend, especially if you’re investing in quality companies.
I encourage those of you with a firm understanding of investment strategy and an informed approach to your financial needs and investment horizons to find your own mix of long and short positions to create your own balanced and “hedged” portfolio. For example, I am now long on cryptocurrency-related stocks (I used to be short on Bitcoin ETF GBTC but liquidated and reallocated accordingly) and quality tech companies like Amazon (although I will day trade large leveraged AMZN positions from time-to-time to get a few extra bucks in my liquid investment pool) and Apple. I am short on newer tech companies, chipmakers, social media companies, and biotech companies. And by short, I mean take the money and run! To summarize, I will ride out the volatility in both the cryptocurrency and traditional markets with strategic positions and jump in-and-out of other opportunities I see. But please, dear readers, be careful about your unique investment horizons and anticipate your cash flow needs, both now and into retirement. Never risk more than you an afford to stay long on or even lose in the glorified casino that we call Wall Street!