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How To Defend Against More 3% S&P 500 Down Days Like Wednesday

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Learn how to assess market risk, protect against losses, and prepare for uncertain times with defensive strategies and insights from past crises.
The article from Seeking Alpha discusses strategies for investors to protect their portfolios against significant market downturns, like the over 3% drop in the S&P 500 experienced on a recent Wednesday. It highlights the unpredictability of market movements, emphasizing that while such drops are not common, they can occur due to various factors including economic reports, geopolitical events, or shifts in investor sentiment. The piece suggests several defensive investment strategies: diversifying across asset classes, sectors, and geographies; employing hedging techniques like options or inverse ETFs; maintaining a cash reserve to buy assets at lower prices during downturns; and focusing on quality stocks with strong fundamentals, low debt, and consistent dividends. Additionally, it advises investors to stay informed about market indicators and economic signals that might precede significant drops, and to consider rebalancing their portfolios to align with their risk tolerance and investment horizon. The article underscores the importance of a long-term perspective and not reacting hastily to short-term market volatility.

Read the Full Seeking Alpha Article at:
[ https://seekingalpha.com/article/4745214-how-to-defend-against-more-3-percent-s-and-p-500-down-days-like-wednesday ]