How would someoneinsure his paper assets against market crashes?

Question

How would someoneinsure his paper assets against market crashes?

Answer 1

Alcan is right.

If you hold stocks with a broker, the broker itself is insured against mistakes that the broker makes or that might happen to the broker (I don't know, if someone hacked their system or something).  But that insurance doesn't protect you against whether those stocks fall of their own accord.

Gold and silver are some of the best "real" investments.  The other being the house over your head, if you actually own it outright.

MoneyEnergy

http://www.getmoneyenergy.com

Answer 2

You cant. Paper is just that....paper. If you want insurance against market crashes you have to buy gold and silver. The real thing not the ETFs.

Answer 3

You can buy put options in the form of a general market put on the S&P 500, or if you have individual stocks you can buy puts on them.

A put option will increase in value as the value of the underlying assets decreases in value.  If you are perfectly hedged you will gain $1 in value on the put for every $1 you lose on the underlying asset.  The down side is you have to pay for this put option insurance in the form of an option premium which will be lost regardless of what happens.  In this way it is similar to car insurance in principal you pay for it weather you use it or not.

Precious metals "can" be a hedge, but remember that PM's can decline at the same time paper assets decline, they are not inversely related.  If this happens you have done yourself more harm than good.