Following a sharp deep drop in the US markets when it appeared Donald Trump would win the election, the US and global markets have been creating new highs, clearly shown in the DJIA and the two indices of global stocks  since the US election.

As well, the Volatility Index ( VIX) which uses option prices to measure expectations and is known as the ‘fear’ index, shows that investors have thrown off the threat of the Trump era, and confidence prevails.

However, in this overall positive sentiment, there are increasingly investors who feel caution is the key, and that we could be heading for a decent correction.

The knowledge of hedging principles become important when examining one’s portfolio, and being prepared to take protection action is the key to maintaining the value of assets.

Often stocks which traditionally offer lower volatility come into favour and some of those exist in the A-REIT sector, focusing on specific market “niches”, such as properties in the education, health care, aged care, and agriculture market.

 

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