Each to their own, but for those of us that start to feel a bit uneasy when we look at the currently high company valuations and their associated stretched ratio’s, it’s nice to have the option to try to remain in the markets whilst also hanging onto the gains that we have made. We’re all happy to play the markets when they are going up, and for some of us it’s also useful if we can try to play the markets as they are going back down again.
As the markets start to flatten out and fall, some will stay in, some will go back to cash, some will hedge, and some will short. We’re all different and regardless of how each of us want to manage these rises and dips in the markets, it’s just nice to have the options available to choose from.
I try my best not to destroy the value of some of my other assets by not crashing my car or burning my house down, but I still buy insurance each year to protect myself just in case. The value of my portfolio is just another asset that I’m looking to protect over the short, medium & long term.