VANITY: Looking for ideas to set up a short term hedge

None ^ | 9/16/03 | kh

[kinghorse]

Ok, I am frustrated. My 401K only offers twice a year changes in investment programs. I feel like a sitting duck.

I am sitting here strongly desiring to create a hedge against the possibility of a severe attack occurring in the USA between now and the advent of Ramadan. I don't want to hear from dead enders or prophets, I want to hear from investors.

My HarrisDirect account can purchase all sorts of investment products. I could go with straight shorting of stocks but I think I want to do a mixture of shorting, gold stock investing and investing in foreign currencies (the Chinese Yuang and Euro). I want to hold these for the next two months only. The people at Harris couldn't help with the ticker symbol for whatever financial product gets me a proxy on foreign currencies (just like owning gold mining stocks is a proxie for holding ingots). Advice of tickers, whatnot is needed.

In a nutshell, I am trying to set up a doomsday fund to hedge against my 401K investment that has seen a nice appreciation in the last 9 months.

[kinghorse]

advice welcome, as long as it pertains to investing and the timing

[Mr. Bird]

Well, this doesn't go specifically to your request, but you should definitely put pressure on your employer to look at other 401(k) administrators. The days of twice-a-year changes are long gone. Most companies now offer the option of daily changes in allocation, thanks to web-based programs and other tech advancements.

Of course, conventional wisdom would tell you to stop playing your 401(k) like a trader and leave it be.

[AdamSelene235]

Use in the money DIA puts with 05 expiration as they have little time value and will allow you to recover much of your capital if nothing happens.

I'm also fond of BPT as a proxy for oil (although oil is dropping at the moment).

FNM puts are also a good bet.

GG is a decent gold stock.

Good luck.

[ctlpdad]

If you go to a nursery or garden shop, the sell lots of potted shrubs. I would suggest Yew, Arbor Vitae of Dwarf Alberta spruce.
Line them up real close, and prune away and you have yourself a nice short-term hedge. :)

[The Other Harry]

Don't try to get too smart. Just a regular index fund will be fine. Ride out the bad times, and don't go jumping around.

I do know what I'm talking about.