Barron's Streetwise 10% Market Dip? How Not to React
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Mar 14, 2025 
Barry Ritholtz, Chief Investment Officer of Ritholtz Wealth Management and author of 'How Not to Invest,' shares his investment expertise. He discusses effective strategies to hedge against market downturns and critiques common investment approaches. Ritholtz emphasizes the long-term benefits of stocks over other assets and warns against simplistic trading tactics. He highlights the importance of avoiding mistakes and underscores the value of diversification, patience, and human psychology in investing, all while keeping the conversation engaging with personal anecdotes.
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Hedging Strategies to Avoid
- Don't buy inverse ETFs for long-term investing, as they compound losses.
- Avoid raising cash based on market timing predictions, which are unreliable.
Cash and Timing
- Be cautious about raising cash and assuming you can time the market.
- Consider increasing cash for emergency needs or if bond yields don't justify the risk.
Stock Risk and Defense
- Evaluating individual stock risk is challenging, and past volatility isn't a perfect predictor.
- Reputational defensive stocks like packaged foods and utilities might not always be safe or cheap.
