CAOS
EA Series Trust - Alpha Architect Tail Risk ETF
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So, 70% large cap, mostly growth stocks, 20% crypto, 10% gold (after its gone parabolic)? It seems like a very risk on portfolio. I think you'll dump it when the next bear market hits. Most of these tickers are highly correlated -- rebalancing won't save you. It's easy to say you have a high risk tolerance in the good times, but when you're down 70%, you'll have regrets. 45 years is a looong time. If you're serious about high risk assets, you need some sort of hedge in there. Buy puts each year to CYA or consider allocating 10-30% to stuff like KMLM, DBMF, BTAL, CAOS, HIDE.
Hedging this rally. KMLM, CAOS, VIXY.
CAOS has underperformed SGOV in the past years while only gaining 4% this April (before giving it all up). So to use this you not only have mediocre gains, but also need to time the bottom to sell the gains. If you can really time the bottom, then might as well just hold SGOV and buy in TQQQ.
CAOS might be a better hedge against a sharp drop in the market because its value doesn't decay like that SQQQ. However, it works as a hedge only in rapidly declining markets. [https://funds.alphaarchitect.com/caos/](https://funds.alphaarchitect.com/caos/)
Just hold CAOS or TAIL. That's what it's made for.
CAOS has a return of 4% for the past year. Why would use that for anything?
Sell a put, but can be a bit technical. A bunch of ETfs could help, either add BTAL to your portfolio (short high beta) or something like TAIL or CAOS ETF. The later two are designed to hedge and professionally managed.
Usually a crash in the financial markets precedes an economic recession, because the market is forward looking. Also, market timers lose the longer time goes on. Long duration bonds are more volatile than short term ones, and should really pop if central banks decide to save investors through rate cuts. For small rate cuts, a 30 year bond will increase 60x more in price than a 6 month bond. There are other products depending on your level of conviction. Indeed, gold as you mention, whose only real strength as an investment in my view is that it doesn't depend on the strength of the dollar/US economy unlike treasury bonds. As your conviction increases, consider managed futures, puts, inverse ETFs, the CAOS ETF, and selling short. I would hold international equity regardless, but not take any sector bets such as on real estate. It got decimated during the covid crash, by the way.
Good port but this is a possibility. Stagflation. 2022 again on steroids when bonds do not turn green when stocks take a beating. Easy to add a small amount of gold futures, maybe managed futures trend ETF, tail etf like CAOS or anti beta BTAL. Or just commodity focused fund like COM or CTA. Or a combo of some of these.
KLML or CAOS in my opinion, but you need to manage your expectations as they can have VERY long stretches of not doing anything.
When you buy the option, like buying a put, you just pay the premium up front. You cant lose more than the premium paid. If the market never hits the strike, youll just expire worthless and that money will be gone. Maybe if you dont understand this at all you should let a manager handle it. Some products provide equity drop downside hedging via options like CAOS or SWAN.
A hedged equity ETF like HEQT would be an alternative option. It uses a costless put collar spread so you're not just bleeding on the put premiums. There's also TAIL and CAOS, which are pure tail risk protection etfs.
For those wondering like I was where the 2013-2022 history for CAOS came from before it was listed as CAOS this year, it was converted from Arin Large Cap Theta Fund (AVOLX).
CAOS has positive expected returns.
CAOS is best, possibly DBMF or Treasury bonds
Can you please elaborate on that? Wth is CAOS
Let me introduce you to: CAOS