Argent Quarterly Investment Commentary – March 2014
“The only perfect hedge is found in a Japanese garden. ” – Trader’s Credo
As any gardener knows, a well-pruned hedge is not only aesthetically pleasing, it can also protect vulnerable plants from too much wind, sun and predators. Likewise, investors also seek hedges for their portfolios, hoping to reduce downside risk and protect unrealized portfolio gains. Inevitably, discussions about hedging techniques become more frequent as market gains progress. This particular bull market for stocks started March 9, 2009 – five years ago. Since then the average U.S. stock has advanced over 200 percent, including dividends. It has done so in the face of a nuclear disaster in Japan, a slow-growth U.S. economy, two U.S. debt crises, a near meltdown of the Euro and the invasion of Ukraine.