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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Bread Upon The Water who wrote (3984)	3/3/2010 12:34:03 AM
From: JimisJim	Read Replies (1) \| Respond to of 34328

The problem with using such vehicles for insurance is the cost of having any meaningful amount... I don't know, but suspect that if the market crashes, 35K would not be a meaningful amount of insurance to collect and if it doesn't, it's a wasted 3K... Just for the sake of argument suppose it takes 10 or 20 or 30 times as much "insurance" to recover any meaningful amount of money from a crash -- to make up for what one loses... and then multiply that 3K by 10 or 20 or 30 and that insurance starts to look expensive. If I think about insurance or hedging my PFs, I'm going to look at options instead because they provide superior leverage for the same cost... but I don't do much, if any, hedging because if I don't have confidence in my investment positions and think I need insurance, I get out instead... I use cash for my insurance when I feel there is significant risk of a market plunge or a bubble bursting and so far that has worked very well for me. Jim