CFD Maintains Its Role For Another Day...

Jul. 17, 2013 6:18 PM ETCFD
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Portfolio Strategy, Dividend Investing, Macro

Contributor Since 2009

The author is a student of the financial markets and enjoys following their course.

CFD was down today. The good news is, as a hedge, one would expect short term money to flow out of commodities and into more traditional equity based positions as the equities rallied. Further making them rally etc etc. None the less, perhaps its not in the ordinary state of things to celebrate a slight decline in a part of a portfolio, but when that part of the portfolio is a hedge, and the rest of the portfolio gains, perhaps there is some sort of slight celebration in order. For of course this implies that the "hedge" works to a certain extent.


In keeping with this theme of "things working as they should" here's a pool(billiards) based Rube Goldberg machine;

(Perhaps a simple index/beta hedge isn't quite as physically complex but anyway..)


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