Sometimes the best hedge is a direct hedge.  Or cash for that matter.

The idea of hedging tail risk, e.g. the Black Swan, has driven demand for all manner of VIX-related products.  So much so that it seems like demand for products that are long volatility seems to have distorted the market.  In any event investors who have embraced VIX ETNs have little to show for it.  Indeed it makes one wonder whether we should be more focused on the simple task of managing exposures.  In today’s screencast we ask whether the rise of the volatility-complex has obscured the bigger picture for investors.

Posts mentioned in the above screencast:

Is the volatility situation all that anomalous historically?  (VIX and More)

Is there a better VIX ETN out there?  (InvestorPlace)

Weekly chart of the iPath S&P 500 VIX Short-Term Futures ETN (VXX).  (Finviz)

Time to hedge with put options?  (Barron’s)

Jeff Carter, “If you didn’t buy puts on the way up, there is nothing to do on the way down.” (Points and Figures)

Tail risk, de-risking and the allure of cash.  (Abnormal Returns)

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