| Whatever type of retirement fund you have, be | | | | very risky. However, some of the leading |
| it 401k 403b, Roth IRA or plain old IRA, you | | | | mutual fund companies, like Fidelity and |
| want to spread your risk. | | | | Vanguard, are now offering funds which has |
| | | | some hedging. |
| Stocks go up and go down. Treasuries and | | | | |
| government backed bonds are very safe, but | | | | What is hedging? Hedging is betting with some |
| they also go up and down in value, although | | | | of your money that the price will go down,and |
| you will always get a reasonable return. You | | | | with some that the price will go up. Of |
| can lose your shirt in futures and | | | | course, you put more money where you think |
| commodities. Gold is attractive, too. So what | | | | the market is going, and some against it. If |
| should you do? | | | | the fund manager is right, the value goes up, |
| | | | and he is wrong it goes down a little. In the |
| Most people start off with investing in | | | | long run, a good manager, with good |
| mutual funds, or they rely on a professional | | | | investment tools and research, can |
| adviser - by the way professional means that | | | | consistently make profits whatever the market |
| he gets paid for doing that job, so don't | | | | does. |
| assume a professional adviser is an expert. | | | | |
| Mutual funds generally invest in stocks, but | | | | Therefore it is a good idea to have a small |
| it is certainly a good idea to have a | | | | portion of your retirement fund in a fund |
| proportion of your retirement fund invested | | | | that is involved in hedging in a conservative |
| in high-quality bonds - and the older you get | | | | manner. This is a good way to get into |
| the higher the quality you need. | | | | commodities - any other way is far too risky |
| | | | unless you have money to throw away, and if |
| Stocks can be risky | | | | you do, you won't be putting it into a |
| | | | retirement fund. Investing in hedged funds |
| Recently, managers and investors alike have | | | | and commodities is not something to undertake |
| realised that markets do go up and go down, | | | | on your own - you need to seek the advice of |
| and so they have sought to diversify out of | | | | a good financial adviser. |
| stocks, or in some cases out of the USA. | | | | |
| Diversifying overseas is either risky - in | | | | Disclaimer |
| new markets like China and Korea - or is a | | | | |
| currency play. Why? because the leading | | | | The information on this web site does not |
| markets in the USA, UK, Europe and Japan tend | | | | constitute an offer in any way. It gives |
| to move in the same cycles - and it is long | | | | general information, but is not financial |
| term cycles that you need to watch for your | | | | advice. The aim is to help you decide what to |
| retirement fund. | | | | do about your retirement plan, and the |
| | | | importance of saving for retirement. You |
| Hedging helps | | | | should consult a retirement planning adviser |
| | | | with a proven record before setting up a |
| An alternative is a hedge fund. But these are | | | | retirement plan. |