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Let me paint you a picture: Imagine your house, safe and sound. You want to insure it, so you buy a policy and pay regular premiums on it. Of course, if the unthinkable happens, you're covered.
Now imagine you've got no policy, and, one day, your house is starts to burn… You desperately call Allstate or Metlife to find that a policy is getting way more expensive with each passing second (though, I'm pretty sure no insurance company would write a policy under those circumstances).
The thing is, millions of people who wouldn't go a day without homeowners' insurance balk at "insuring" their portfolios with proper, inexpensive, and proportional hedging. Then when the "fire" starts, they're either paying through the nose… or going without.
In fact, this very subject came up just the other day on my Markets Live stream, and by the time we were through with the session, we were all a lot smarter – and better protected.
About the Author
Chris Johnson is a quant - he's obsessed with building and perfecting mathematical models that allow him to predict, with startling accuracy, the direction of the markets, entire sectors, and individual securities. For the last year, he's been researching and building a new system that lets him move swiftly in and out of the hottest stocks in the market for life-changing gains - entirely on his own terms. The results of his newly-minted Night Trader system are nothing short of amazing.
Chris also contributes to Money Morning as the Quant Analysis Specialist.