Meanwhile, bond prices tend to be more stable during recessions. Stocks are typically more volatile than bonds, so they tend to lose value during economic downturns. One common method is to invest in both stocks and bonds. There are many ways to hedge your bets in the stock market. That way, if Company A’s stock price falls during a recession, the stock price of Company B might rise, offsetting some of your losses To hedge your bets, you could also invest in company B, which makes products that people will still buy even if there’s an economic downturn. You believe that Company A is a sound investment, but you’re worried about a possible recession. For example, let’s say you own shares of Company A. In the stock market, hedging your bets means making investments that will offset any potential losses from your other investments. ![]() That way, if more people show up than you expected, you won’t run out of food Hedging Your Bets in the Stock Market You could hedge your bets by ordering enough food for 20 people even though you’re only expecting 10. The phrase is most often used to describe financial investments, but it can also be used more broadly to describe any situation in which you take measures to reduce your risk of lossesįor example, let’s say you’re planning a party and you’re not sure how many people will show up. It’s your life, your career success–it’s worth making the effort to hedge your bets to make it happen.When you “hedge your bets,” you protect yourself from loss by making a defensive investment. ![]() Give yourself a good talking-to, if that’s what’s needed–or have someone else give it! Think about these things before you get locked into a situation that has an unavoidable dead-end. To use the brick wall concept as an illustration, could you prepare for career success in a way that opens up a door in the wall somewhere off your current path? Or how about an interim step on your path that gives you a reachable jumping-off point for the final leap over the wall? It’s always a good idea to have alternatives–steps you could reasonably take if necessary. If you run up against a brick wall, what options do you have? Those challenges can effectively stop you in your tracks if you haven’t taken precautionary measures to give you alternatives. Life has a way of throwing challenges at you that you can’t prevent or control–at least, not completely. Just be aware that you’re probably going to face risk and the possibility of loss even if you do your best to avoid that. On the other hand, if you’re adamantly against taking risks at all, the practice of hedging bets won’t help you. In fact, that’s at the heart of hedging bets–minimizing the risk of loss or failure. ![]() For example, does your chosen career target require a major relocation, an ability to travel extensively, etc.? You’ll need to take things like that into consideration. Pinpoint key areas of your life that aren’t directly career-involved but could or would affect your career success potential.Create a career plan to develop and/or acquire those strengths. Conduct the same kind of analysis to identify “in demand” strengths and potential strengths that you have but could do more with or that you could easily acquire and would like to use.For example: Are there changes in your field that will require knowledge you don’t have and don’t want to acquire? Explore those to gain an understanding of their possible impact on your success. Evaluate your current situation and try to determine the area(s) where you’re most vulnerable.Otherwise, you could waste a lot of time (and maybe money) charging off in the wrong direction. Make sure you know what career success really means to you before you try to hedge your bets.You might already be taking one or more of the following actions, but if not, I encourage you to begin that process. However, although it might not be thekey to career success, it’s certainly a key to that goal. ![]() Hedging your career bets doesn’t come with a 100% guarantee. Your overall career success could hinge a lot on recognizing this fact and taking preemptive action to increase the odds in your favor–in other words, hedge your bets for career success. The future is necessarily at least somewhat uncertain, unpredictable. “If you hedge your bets, you don’t risk everything on one opportunity, but try more than one thing” (That’s not a bad approach to adopt if you want to pursue long-term career success, as well as shorter-term job satisfaction.
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