Strategists at Goldman Sachs have exchange traded fund (ETF) guidelines for a hedge against the slowdown of the U.S. economy. One option that strategists recommend is to buy put options on ETFs that track the industrial, raw-material and technology industries, reports Jeff Kearns for Bloomberg. Puts on these ETFs give the best potential payouts across sectors if there were a slowdown to U.S. growth expectations. This means the contracts allow investors to sell shares by a certain date and for a set amount.
The likelihood of an economic slowdown in 2008 has increased as economic data continue to weaken. Last month there was an unexpected loss of American jobs. Employers cut 4,000 workers in August, the first loss since 2003, reports the U.S. Labor Department.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.