We’ve never offered a discount before on the VIX Portfolio Hedging (VXH) Strategy, and the coupon code at the end of this post is only valid through the end of the week. I don’t know what’s going to happen in the future, but I know that the cost of hedging downside risk is relatively cheap here, and that some investors have taken an “all clear” attitude prematurely. If your portfolio didn’t weather the storms of August and September easily, you probably aren’t as well-hedged as you want to be.
As the yield on Italian 10-year government bonds spikes to new all-time highs
and equity markets tumble
the expected year-end rally in equities is looking increasingly uncertain, and European efforts to contain the sovereign debt crisis seem particularly ill-fated.
You might be wondering whether portfolio protection is already too expensive. But consider that the VIX is still well off its highs from the August and September period of renewed fear. If the situation in Italy and possibly Spain continues to darken, this year’s VIX high of 48 could be taken out easily.
The VIX Portfolio Hedging (VXH) Strategy takes long positions in VIX-linked instruments to provide a robust portfolio hedge. The strategy allocates capital tactically to avoid high hedging costs during quiet markets, and increases position sizes as needed to offer protection during tumultuous periods. Accounts trading the strategy returned 167% in August 2011 and 27% in September, gaining 91% in total year-to-date.
The strategy is available by subscription to individual investors, and new subscribers who sign up this week can use the coupon code 45AE90 to get 15% off the regular price. This code will expire on November 12, and is not available for registered advisors, institutions, or other market professionals.