AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
Expert: John D Smith, CFP Date: 4/28/2006 Subject: Hi John, Most mutual funds...
Question Hi John, Most mutual funds do well when the general market is going up but what types of mutual funds would you suggest for hedging against declines. Are there well perfoming funds that are diversified with the idea that they will do reasonable well when the market is doing well yet can withstand a declining market with less that average losses or even gains. Thanks very much.
Answer In my opinion, the best way to protect against this is to diversify your holdings will large US, small US and international mutual funds. In addition, growth and value type funds within these categories. If you are looking to hedge against a decline in the overall market (S&P 500 for example), then there are funds out there that are desigend to do this. These types of funds are called market neutral funds. If you go to www.morningstar.com you should be able to research for these type of funds. If you cannot get the info you need there, let me know and I can perform a quick screen for you. I hope this helps.
