If you wanted to hedge corona virus, what would you do?

michaels

Title says it all really. What funds / asset classes would protect fund pur basing power if/when SARS starts spreading outside China?

MarkCarnage

Past analysis of market behaviour in similar outbreaks back to Spanish Flu suggest it's a waste of time. In many cases asset classes recover quite quickly from initial falls. In others, it's difficult to isolate the impact of the epidemic from other forces - e.g the recovery from the 2008/9 recession then when there was the avian flu scare.

A balanced portfolio should not be unduly influenced longer term by something like this, unless it reaches a scale where your portfolio is the last thing you're thinking about. I think we are a long way away from that. Read about Spanish Flu in 1918 if you want to put this in perspective.

Malthusian

Wrong question. The answer to the right question is to take out life insurance. (And income protection insurance for the event that bird flu or whatever it is now leaves you alive but too weak to earn your current income.)

GunJack

With all your hedging threads recently, are you looking to become a gardener or something?? :rotfl:

ajbell

Gold and Bitcoin.

kinger101

Shares in companies which make surgical masks. Or the furnaces they use in crematoria.

Thrugelmir

Invest in funeral undertakers.

michaels

Physical gold is difficult to purchase and store.

How about us short treasuries or even USD bank notes depending how disrupted we expect the financial markets to be.

ex-pat_scot

:money:

michaels wrote: »

Physical gold is difficult to purchase and store.

How about us short treasuries or even USD bank notes depending how disrupted we expect the financial markets to be.

Gold ETF then. LSE:PHGP.
Or short airlines.
Buy companies that make shovels, cremation stuff, coffins, face masks. Pharma in general.

Or frankly just keep invested in global diversified ETF and let the market swings do what they do in these types of situations. (HINT that's what I am doing)

MarkCarnage

As noted above, the big danger is that you miss the upturn in risk assets. FWIW I can think of a lot more plausible and better reasons to adopt a more defensive asset allocation than a flu epidemic right now.

[Deleted User]

michaels wrote: »

Physical gold is difficult to purchase and store.

How about us short treasuries or even USD bank notes depending how disrupted we expect the financial markets to be.

Seems counterintuitive. Treasuries would be where people would run to for safety. In fact, they already did since the outbreak.

Pharmaceuticals too.

(Not that I am moving a finger. Stay the course. Ignore the hype).