Depending upon your position the Third Quarter Performance was extremely painful if you were on the long side. Even if you were on the short side depending upon when you got in or what day could have been potential just as bad. With the extreme volatility we experienced in both an up and down direction it was tough place to be.
Verses the S&P all of the other major global markets performed worse. The only asset class to outperform was the bond market and gold of course which are both looked at safe havens in times of volatility and uncertainty.
A few ways to protect yourself in these turbulent times are option positions. Buying put options can help limit your downside exposure but as volatility increases it gets more expensive. Think of buying house insurance as your home is already on fire. One way to counteract this or lower the cost of a put is using a put spread which lowers your costs but limits your profitability. Although bonds outperformed they seem risky as price appreciation has gone parabolic as rates are at historic lows. With most countries in a race to devalue their currencies, gold can be a hedge against this volatility.
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