I am a long-term investor with a very diversified portfolio. Over my 22 years of investing, I’ve learned a lot of lessons the hard way. The biggest lessons usually come in the face of a market crash, and I’ve been through four of them: The 1998 Long-Term Capital Management collapse, the 2000 dot-com bubble, the Sept. 11 aftermath and the 2008-2009 financial crisis.
With each succeeding market crash, I had more wisdom about how to respond. I’ve since developed a comprehensive strategy for handling large market corrections or a market crash.
Diversification is the single best line of defense you have against a market crash, and one of the arenas that nobody talks about are “alternatives”. These are funds that involve specific market strategies that used to be reserved for hedge funds.
These funds don’t always correlate to the overall market, and can provide a long-term hedge.