Tao Economics

Navigating Economics Cycles for Preservation and Survival

2 Hedges for a Potential Volatility in the Market

- Posted in Hedge by

The VIX which measures volatility in the stock market is at extreme lows going into June.

With the lawfare and conviction on Trump, the economy cooling and war drums continuing to beat, it is easy to see an increase in volatility over the coming month(s).

Markets hate uncertainty.

I’m buying Ticker VXX as a short/midterm hedge today. This is not a long term hold, and if there are any rapid gains (share prices in the $14 - $17+ range) I will likely take profits.


I’m expecting a one to two month holding period. Have to see it as it comes.

For something more for a larger position size I’m thinking something more like SGOV for a wait in see: https://finviz.com/quote.ashx?t=SGOV&p=d It pays 5% and its treasures that expire within 0 to 3 months.

I also do not believe government bonds are a long term hold though. We are in a wave where assets move from public (government) to private assets (stocks, real estate, PM’s, crypto, collectibles).

Including an interesting chart of % of stock dividends above treasury yields which could be signaling some pain coming up.

Capital may be confused on what to do short term, we could see a short term correction in tbill yields while markets correct.