Hedge S&P 500 Exposure with Protective Puts

14 days ago

"if you must stick to the S&P 500, you can use 5% of your wealth to buy a put. So you limit your downside to 5% and you stick to the upside of 30%. That's a positive risk and reward scenario with certainty. Just look at the puts here. You can just protect yourself for 14 months. This is December 2026 with a total put and forget about it."

The speaker advocates for hedging S&P 500 exposure by allocating 5% of one's portfolio to protective put options, which limit the downside to 5% while preserving a potential 30% upside. The strategy is presented as a defensive, risk-managed tactic that ensures certainty in long-term compounding.

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