The cash cushion makes a comeback

It can protect against over-exposure to an over-extended stock market

JITTERY investors see danger in every market thrust upwards.

For them, soaring stocks aren't confirmation that the future looks bright. Sustained market gains seem more like evidence that optimism has been hijacked by delusion and greed, and due in time to be exposed and reversed.

With the Standard & Poor's 500-stock index up almost 18 per cent over the first nine months this year, the sceptical and fainthearted can choose from a bulging bag of protective hedges.

They can short stocks individually or the market as a whole. Some inverse index funds and exchange-traded funds are leveraged to triple any move, providing outsize profits in a market slide, but enormous risks should the market keep marching...

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