Asset class inverse to stock mkt

[ArthurMcB]

What asset class typically does well when stock mkt doesnt?

US Gove Bonds?

Anythibg else?

 

[Sarenco]

Government bond prices, particularly long-dated bonds, typically - but don’t always - rise when stocks fall.

 

[Cameo]

What asset class typically does well when stock mkt doesnt?

US Gove Bonds?

Anythibg else?

An ETF that gives the same exposure as being short the market i.e. it's value goes up when the market falls

 

[joe sod]

An ETF that gives the same exposure as being short the market i.e. it's value goes up when the market falls

Then you have the issue of deemed disposal taxation on ETFs every 8 years, much discussed lately as pascal Donohue has still failed to abolish it.
Therefore if we had a 2008 style crash that etf should rise in value but all your other investments would have fallen sharply. If you were to liquidate your assets or were at 8 year deemed disposal event you would have to pay 38% tax on the gain in that etf but get no loss relief on all your other investments that had fallen sharply. Therefore and this shows the stupidity of Irish investment taxation the government would be taking 38% tax even though overall you are still losing money. It's shocking

 

[ArthurMcB]

OK so long dated US Bonds it is.

 

[ClubMan]

long dated US Bonds it is.

Not necessarily...

Government bond prices, particularly long-dated bonds, typically - but don’t always - rise when stocks fall.

 

[ArthurMcB]

Thank you @ClubMan for your clarification.

 

[Dr Strangelove]

Bricks and mortar.

 

[ArthurMcB]

I like youre thinking strangelove

 

[Cameo]

I'd buy gold before property as a hedge against a market meltdown

Not sure ling.dated bonds would work in a stagflation scenario

 

[Corola]

An ETF that gives the same exposure as being short the market i.e. it's value goes up when the market falls

Inverse ETFs only do that reliably for one day. They do badly in volatile periods.

If the market went -10% today and +10% tomorrow:

• The market ETF price would go 100, 90, 99 (-1%)
• The inverse ETF price would go 100, 110, 99 (-1%)

Overall the market went down, but the inverse ETF also went down, when it was supposed to protect you.

 

[Bagman]

What asset class typically does well when stock mkt doesnt?

Cash.
Becomes more valuable relative to the other assets falling in value.
But re-entering the market is not easy and over time you are better off sitting in the stock market long term than trying to time it.

 

[Djimi Traore]

Buying put options on something like the S&P500 would do the job. Other asset classes like gold, bonds etc will all react in different ways depending on what the trigger for the market turndown was.

 

[ClubMan]

Buying put options on something like the S&P500 would do the job.

But you do that and invest the same amount in S&P500 and you end up almost guaranteed to earn nothing?