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Buying Airlines as a Gold and Silver Hedge

 Jun 08, 2008 10:00 AM UTC
Return Risk
-15.96% MID
Tracked Blogger
Symbol Sentiment Start Return Closed
CAL Positive 06/08/08 -17.03% --
AMR Positive 06/08/08 -25.75% --

Graphic_arrow1 Via Long Investment Ideas from Seeking Alpha:  

I've written previously about using financial stocks as a hedge against
the falling price of gold and silver equities.<!----> Gold and silver stocks
are currently rising over an unstable global financial climate, rising
inflation and a falling dollar. As the financial environment attempts
to stabilize, we have seen the recovery of many bank stocks and the
fall of most precious metal stocks.


While financial stocks are a great way to hedge a portfolio of gold
and silver stocks, I believe I have found another sector that can be
used as a more efficient hedge. When we look at creating hedges, I
believe looking at volatility is very important. When your hedge moves
up 8%, you want your gold and silver positions to move down by a
similar amount and vice versa.


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