Portfolio Hedging

[decipher]

Have been thinking of hedging portfolio systematically.

Gemini gave an idea of using 1-3% of portfolio on 1Y SPY puts (or alternate indexes) at .12 delta. Check monthly, harvest 50% of gains if delta slowly gets to .25 or .35 otherwise leave the hedge alone. During fast crashes, aggressively roll the puts lower (use 4x as the trigger). Similarly, roll the puts higher if delta falls to .05 during recoveries.

I believe 3% hedge comes from Nassim Taleb (author of black swan book). Thinking of using Shiller PE as guidance to adjust percentage of hedge between 1-3%.

Is this a viable hedge? Are there any other commonly used hedging strategies for small portfolios?

[coffeecaninvestor]

Not to be “that” guy who poo poos ideas like this..but it seems overly complicated and potentially expensive drag on returns.

 

why not just create a live that ensures your not a forced seller, and ride out volatility. 
 

I don’t think there is a silver bullet when it comes to trying to hedge or reduce down side volatility. Dollar cost averaging is probably you’re best hedge especially for a smaller portfolio, and trying to stay fully invested.