Hedging instruments

[Grizzums]

I am managing a virtual fund, equity, and wondering what folks use to hedge their downside risk. My fund is a long fund and I cannot do any shorting with it so I have been using inverse funds (short) when internals indicate volatility and downward movement....

I try to use the appropriate inverse funds to match the greatest percentages of my allocated equities.

I am not sticking to either growth or value strategies but mixing it up a bit as I see attractive opportunities. I am using fundamental analysis both from a micro and macro perspective to pick sectors and individual securities. I am trying to use tactical sector allocation more than individual security picking to maximize returns. I am using technical analysis to determine entries and exits but with how the find trades, this is difficult and I I am having trouble finding enough time to manage real effectively so I guess I'm just going to try and do the best I can under my circumstances.

I do hold a core of "best of breed" securities currently in what I deem to be attractive sectors but will try as I readjust and rebalance to hold positions that are more under the radar so I don't have to pay "best of breed" premiums.

I am also trying not to overdiversify. I have a $mil fund and plan on holding no more than 40 securities at any one time....id like to keep it around 30.

I don't have my sector allcated percentiles in front of me, but I am primarily tech, industrials, energy, and to a lesser degree, materials right now....

How do you personally hedge?

In my personal portfolio I do like to find competitors within a given space where I find one fundamentally undervalued with the other overvalued and I will go long one and short the other....but I can't do that in this fund.

Anyone want to share some strategies in this area?

I also have questions about sound portfolio alphas and betas but ill save that for later.

Thanks.

[Grizzums]

As an example, I bought sds today when the market came back to be about down 40

[Grizzums]

I'd like to hedge using iwm/qqqq and eem but can't seem to do it with this fund.....any inverse funds for these types of hedges?

[Evil-Eye]

Originally Posted by Grizzums

I'd like to hedge using iwm/qqqq and eem but can't seem to do it with this fund.....any inverse funds for these types of hedges?

This may help.

http://www.proshares.com/funds?products=98616&fundType=

[Grizzums]

Originally Posted by Evil-Eye

This may help.

http://www.proshares.com/funds?products=98616&fundType=

Yes...I thought Pro-Shares had several different inverse funds...I had been using SDS but I wanted other options especially hedging against emerging market risks, for my exposure there...

Thanks.

[rtace]

Hey

Was wondering about some basic hedging strategies, pretty much a newb in the hedging area

Thanks