With the decline of confidence in a US recovery SMSF equity portfolios are expected to decline. Can selling OTC index contracts provide an efficient hedge?
There are a number of reasons for a qualified answer. Transaction costs. leveraged exposure to volatility, margin requirements, counter party risk and system risk.
Is there any other insurance like product that provides a similar risk management solution?
Saturday, August 14, 2010
Tuesday, July 13, 2010
Well managed SMSF's need insurance and hedging
The risk management of self managed insurance funds must include insurance, usually for term life. Estate and succession planning require insurance and smsf's will comprise the estate of significant numbers. If plan trustees are in the accumulation and partial pension phases of fund management, risk management tools such as CFD's, warrants, options and futures are advantageous.
Friday, July 9, 2010
Hedge fund risk
Sam Wylie discusses the re-allocation of risk in the forex and interest rate markets on his blog, Core Economics.
How is the risk allocated by insurance?
How is the risk allocated by insurance?
Tuesday, July 6, 2010
Hedging your SMSF with Contracts for Difference
I am using CFD's to hedge a SMSF. The transaction costs are low and I can adjust the level of the hedge quickly. This agility to match the hedge with the hedged gives CFD's the edge over traditional insurance.
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