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Are Stock Protection Funds Worth It?

Aaron Levitt Nov 09, 2017

Investors are facing a bit of a quandary. On the one hand, the market has gone straight up – over 250%, in fact – since bottoming out during the Great Recession. This has created a ton of unrealized gains for many portfolios. And losing those gains would be pretty tragic if the markets suddenly took a turn for the worst.

But at the same time, there are plenty of tailwinds propelling stocks further. A dramatic downturn may not be in the cards just yet for the markets. We’ve already managed to brush off some significant events with ease.

So, the question is, do you cut bait or fish? With new stock protection funds, you may not have to choose.

Downside Protection & Gains

The holy grail for investors is finding effective ways to hedge a portfolio from losses. For most of us, that means a properly diversified portfolio of stocks, bonds and other non-correlated assets. However, even then, we can suffer some big-time drawdowns. Investors holding a traditional 60/40 balance fund still lost money during the depths of the credit crisis.

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