I am a 25 year old investor and I want to build long-term wealth. Right now, I am trying to be tax efficient and am using a buy and hold approach. (My 401k contributions are maxed out each year and this isn't about them.)
To that end, I hold mostly ETFs based on index funds: the Russell 2000, S&P 500, and some specific segment ETFs, e.g. VHT (healthcare), SCHH (REIT), VIS - Industrials ETF, plus technology stocks I purchase individually with a buy and hold approach.
I realized I should try and hedge at least 15% of my portfolio in the event the United States has another economic crisis.
What are good hedges to complement such a portfolio?
Here are some I can think of:
- Gold & silver (what other commodities should I consider?)
- Corporate bonds
- Treasury bonds, or a total bond ETF (I'm not sure how corporate bonds would do if the market had a pullback vs. say government or foreign bonds)
- Foreign ETFs (are Brazil, Russia China, Europe or certain segments more likely to prosper when we have a pullback?)
- Inverse ETFs (I really wouldn't want to hold these long term – doesn't seem wise, especially with their fees)
Which ones are better or worse at being oppositely correlated to my holdings?
Surely I am missing some hedge options that I haven't considered?