Make sure you have your "Defensive Team" out on the Field!

While I'm not a huge sports fan, I know that in football if you're going to win a game its not going to be because of the offensive team alone but it will be due to a great defensive team as well.

I consider our portfolios to be in the same boat! We need a great offensive team but the problem is that most people ONLY have an offensive team and don't have a defensive team at all.

There are three to four defensive blockers that you must have on your defensive team: gold, the yen, the U.S. dollar and U.S. treasuries (the last one is my least favorite)

When money is "running for the hills" it runs to the assets mentioned above. When does money start to run to these assets the most? It's when volatility starts to perk up and when stocks & commodities start to pull back. Well, that's exactly what we have right now. (Click on the chart below to enlarge it.)

How the Defensive Team Stacks Up!

The candle chart in the middle shows that volatility is picking up big time, not just when the Dow fell almost 1,000 points but even since then the volatility has remained elevated.

Obviously some investors have been feeling that this stock market rally was too good to be true and so you can see that they already started accumulating dollars when they got skittish. However, in the last two months they've been picking up treasuries and the yen (in addition to gold of course).

So the big institutions are already bringing out their defensive team onto the field. I hope you're doing the same.

Unlike your stock broker, I'll teach you how (and when) to bring out the defensive team!

Your stock broker will typically only teach you how to play offense by telling you just to "invest for the long term". However, I'm here to tell you that in addition to doing that, there are times when the defensive team needs to come out onto the field, and right now is one of those times!

In my currency newsletter (the Currency Cross Trader), I'll be telling my subscribers the exact time that I'm getting into each of these defensive trades so that we can profit together. I hope you'll be joining us so that you don't suffer the down-side in the markets that many of your colleagues will likely face. Prepare now! I've sounded the alarm for you. Now the rest is up to you.

Sean Hyman
Editor, the Currency Cross Trader

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