I just suggested this in another thread but if you are looking to hedge against downside risk, I would suggest reading up on Ray Dalio's all-weather strategy. The numbers are impressive. This was outlined in "Money, Master the Game" by Tony Robbins. There are plenty of articles on it.
The asset mix has never lost more than 3 percent in any bear market including the great depression and great recession and boasts an average annual return of around 10 percent. As I mentioned in the other thread, I would anticipate future returns may lag slightly due to rising interest rates but it is still a solid portfolio for hedging against a bull market IMO and a very safe short or long-term strategy. This is the asset allocation Dalio personally uses for his family trust, although he uses leverage instruments etc.
30% Equities,
40% Long-Term Treasuries,
15% Intermediate-Term Treasuries,
5% Gold
5% Diversified Commodities.
The future returns are not going to lag "slightly". I think you'd want to be 80 years and dying soon if you went with this.
This is the same guy that Anthony Robbins wrote about, but left out a fundamental part of the strategy which then makes the whole thing an utter waste of time. The original idea is to use
leverage on the (smaller) equities side to increase returns, while having a higher proportion of "stable" assets to reduce the volatility. Without the leverage, the whole system is just ridiculous. Don't really understand why Anthony Robbins seems to think that the most fundamental piece of the puzzle can be thrown out and the strategy still useful. Anthony Robbins - fantastic motivator and businessman, horrendous financial advisor.
If that is somehow not enough of why to ignore this nonsense, we are coming off a
multi-decade bull run on bonds as interest rates have steadily gone from ridiculous highs to lower and lower lows until it is a couple of percent from zero. The only way bonds will continue to return what they have over the last 3 decades if if the country ends up so badly that the interest rates keep getting lower and lower until it is in deflation territory.
The past does not indicate the future.
I think the Dalio strategy (with leverage as originally built around the idea) is somewhat interesting (at least from a theoretical idea), but without it, the whole thing breaks down and frankly is ridiculous. Good luck to anyone who believes this, implements it, and then runs out of money well before they die.