Don't get burnt by a crash

Investors need to structure their portfolio with the right “skew" to protect their wealth

- John Dyall

Our eight-year-old asks lots of questions about time travel. Would I rather travel to the future or the past? And why?

Of course, that was the set-up so he could say what he would do, and why. He'd travel back in time to the original Christmas Eve and give his (limited) savings to Mary and Joseph so they could get a hotel for the night. Nice, although that would have changed the future narrative a little.

Many of us (or our children) will be asking similar questions if there is a major equities correction in the future, particularly if we are nearing or actually in retirement. If we could travel back in time, would we implement a hedge against such an event?

The answer to that question is that we would (or should), but only if we knew that such hedges existed and we'd been educated on how they work. They do exist, but funds managers are pretty silent about explaining them or creating products so they can be implemented.