How to crisis-proof your investments

War, huh, yeah. What is it good for?

Well, with apologies to Edwin Starr, there is no shortage of people out there telling you how to trade the Syria crisis. They clearly believe that war is going to be good for someone.

Buy gold? Buy oil? The talk is all about commodities. And, it’s true, that war and commodities investors have a long and unsavory relationship. In order to fight wars, you need well-oiled war machines, which in turn need industrial metals and energy commodities. And wars from the Battle of the Plassey in India to the Finnish-Soviet Continuation War, are very often about access to commodities and trade routes.

So, I’m not suggesting that, on the brink of a war in the Middle East, amidst a humanitarian crisis, we should be throwing money into commodities and rubbing our hands in glee as we profit from supply shortages and demand boost.

Far from it.

Not only would this be morally uncomfortable – it’d also be downright dangerous to your money.

Because, as we well know, prices don’t move in straight lines, and in times of crisis, high volatility means that smaller investors like you and I can easily be knocked out by the bumps along the road.

So I advise you to avoid all the “buy now” hype. I want to show you something much safer.

Oil prices are on everyone’s minds right now, and the prices of both US and Brent crude have been climbing in recent weeks. When there’s trouble in the Middle East, this is what we expect to happen to oil prices – this region accounted for around 35 per cent of global oil output in the first quarter of this year, so it’s understandable that the market will worry about any disruption to supply.

But a quick look at the price of Brent over the past month shows that it’s been anything but a steady climb …

On 27 August, prices leapt by over $4 a barrel to $115. Four days later, they were back trading at $112. Only the foolhardy, or those with very deep pockets, can afford to invest in oil in a crisis (unless they use the kind of protection I’ll be showing you in moment).

Back in May 2011, when NATO went into action in Libya, US oil prices fell by almost 10 per cent. And in 2003, when the coalition invaded Iraq, oil futures tumbled by 15 per cent.

So, being long on oil isn’t a very safe place to be right now.

It’s the old investment story – prices rise on fear, and fall back when the events happen.

And, as you can see from the chart above, oil prices have been leaping up and down with every will-they, won’t-they news story.

Many traders love this kind of volatility – it gives great price moves, along with great profit potential. But it also has a more dangerous side – the kind of wild swings that quickly kick us out of our trades.

That’s why I want to show you a trading style that loves the great moves volatility brings, but has an inbuilt protection against volatility’s darker side.

It’s a trading method that profits from those big moves that the oil market is famous for – but has a built-in arbitrage to protect from those moves getting a bit too wild for our tastes. And it’s a trading method that doesn’t rely on the price of oil going up (or down). I really can’t think of a safer way to trade this market – a way that’ll protect you from the turbulent times that are ahead.

I first wrote to you about this trading method over a month ago (https://www.tradersbulletin.co.uk/how-to-trade-oil). Back then, I was pretty excited about it – it had just won 13 out of 13 trades since it’s release to a very limited group of traders. Since then, I’ve been inundated with traders, desperate to get their hands on this. And I don’t blame them, because it’s made 30 per cent gains in the last month alone.

Find out more here

Related posts:

How wrong are you prepared to be? How can you profit from the Greek crisis