The Washington Post recently outlined four possible outcomes of a Brexit, or British exit from the European Union. Barring the assassination of another British politician, campaigning is expected to resume this weekend and a vote is to take place next week on June 23rd. As the initial article states, an exit for Britain will result in further negotiations over its relationship with the EU (as well as non-EU countries), referred to by the author as the “terms of divorce”. Ahhh, parting is such sweet sorrow. A Brexit raises many questions. How will trade function? How will market volatility be affected? How will currencies fluctuate? What will happen with the EU citizens living in Britain and the British citizens living in the EU? How will specific areas currently under the authority of the EU, such as agricultural policies, be impacted? Currently there are no answers or plans, only models to feed off, and none of them paint an ideal future. So, how to hedge a Brexit? In the face of uncertainty and volatility, below are three ways one can attempt to hedge a British exit from the EU. Continue reading

gold pendulumGold is often touted as a must-have investment for the most intense of risk-mitigation situations, a “when all else fails” hedging instrument. Indeed, pick an ailment: Inflation? Hedge with gold. Economic and political crises? Hedge with gold. Collapse of modern society? Say it with me, folks, “Hedge with gold”. With the global economy as shaky as it is, multiple countries in one crisis or another, and plenty of uncertainty as to what the future holds to go around, gold continues to make the rounds as a necessary holding despite the fact that its value in US dollar terms has been steadily declining over the last four years after reaching a peak in 2011 of almost $1,900 an ounce. In the wake of the Fed’s recent decision to stand pat on interest rates and gold’s subsequent jump today, here are 3 reasons to avoid gold, both as a physical or paper holding, apart from a very small percentage of a well-balanced and diversified passive or lazy investment portfolio:

  • It’s a highly emotional and psychological asset
  • There’s no historical evidence that it hedges well against any risk
  • It has very little practical use

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