Hedging Market Portfolios Using Analytics

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What follows is a recording of my presentation to the San Francisco chapter of the American Association of Individual Investors on June 25th. Given the proximity to San Francisco, many of these investors have large positions in current or former employers’ shares, so risk management was of particular concern to them. 

Slopers with a similar concerns may find this of interest, although I also discussed the importance of hedging market risk. In addition, I discussed the hedged portfolio method for constructing portfolios designed to maximize expected return while strictly limiting risk. 

Hedged Portfolio Performance

Below is the final performance of the most recent aggressive portfolio to finish, the December 26th, 2019 portfolio hedged against a >20% decline, which I mentioned in the presentation above. You can find an interactive chart for this portfolio on the Portfolio Armor website here.