Alternatives to Passive Indexing - 1

Part 1 of 2: Hedge a Common Stock Portfolio with Exchange-Traded Funds

Photo by Tyler Prahm on Unsplash

Summary:

• Passive index investing assures average returns to the market, whereas hedging a portfolio of common stocks with low-cost exchange-traded funds increases diversification and safety.

• When hedging a retail portfolio, the index ETFs from Vanguard Group are wise choices because, as a mutual-owned enterprise, it is immu…