Having a stock hedging strategy is like having insurance… sort of. In general, it’s good to have a way to minimize damage when things go wrong. In a best-case scenario, that's what hedging against stock market crashes does. The Risks And Downsides of Hedging Strategies When formulating a hedging strategy, it is good to clarify the specific risk you are hedging against. (Hedging against something generally means protecting yourself from that risk.) For example, car insurance hedges again...
