Source: Tradingveiw as of 8 July 2022 (Click to enlarge the chart) Comparison between the SPDR Gold trust vs. As shown in the below chart, the gold holds its value when SPX 500 crashed in GFC, the US-China trade war, and Covid. The gold-related ETFs might be also options for low transaction fees and are easy to manage, such as SPDR Gold Shares (NYSEMKT: GLD) and iShares Gold Trust (NYSEMKT: IAU). But it is not necessary to buy physical gold and keep them in storage as this could cause a high storage fee. Gold price usually goes up when there is a market crash or in an uncertain time. If the risky assets account for a large percentage of your portfolio, you could also consider increasing the safe-haven assets to hedge the risks with your planned investment funds.

In addition, the leverage risk is also something that you need to manage when using a CFD account to avoid a margin call. Sometimes, traders refer to option markets to decide the CFD closing prices. In a bear market, the short positions usually need to be closed toward the bottom. However, this requires a personal decision regarding the proportion of your portfolio that needs to be hedged, and the timing when the hedging positions need to be closed. When the price falls, a short position will bring gains for the same amount as the falling prices. For example, you can place a short sell trade for any shares that you are holding when they are plunging to hedge the running losses, which is the beauty when you have a CFD trading account. In short, placing a sell position in a downtrend market can bring the same return as a buy trade in a market rally. CFD short sellĬontracts for difference (CFDs) are derivative products that enable you to trade on the price movement of underlying financial assets, which allows both buy and sell-side trades. There are some tools you could consider hedging the current losing positions.

But panic selling usually leads to unnecessary losses once markets bounce back. It is certainly a very hard time for those investors who are holding a bunch of losing positions. The US stock markets ended the worst first half in 50 years, with S&P 500 entering a bear market, down more than 20%. Despite the recent rebound in the equity markets, the global economic outlooks are still not in good shapes, with the Ukraine war ongoing, elevating inflation and central banks’ rate hikes.

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