Title: Hedge Your $1 Tagline: Hedge Your $1.8M IRA Inheritance: Reduce Market Risk by 30% with Strategic Hedging Problem: Problem Statement: After the recent passing of her husband, Eleanor, a 68-year-old retiree, inherited a $1.8 million Traditional IRA heavily invested in S&P 500 index funds. While she appreciates the long-term growth potential, Eleanor is now more risk-averse, especially given her reliance on the IRA for income. She worries about a significant market downturn eroding her nest egg, leaving her vulnerable in retirement. Eleanor is seeking a way to protect her portfolio from potential losses without selling off her existing investments and triggering substantial tax implications. She lacks the expertise to determine the proper hedging strategy herself. Solution: Solution Statement: Using Golden Door Asset's Hedge Ratio Calculator, Eleanor can determine the ideal number of S&P 500 futures contracts to short, effectively hedging her portfolio against market declines. By inputting her portfolio's current value ($1.8 million), Beta to the S&P 500 (assumed at 1 for simplicity), and the value of a single S&P 500 futures contract, the calculator outputs the optimal hedge ratio. Eleanor can then implement this strategy through her brokerage account, offsetting potential losses in her index funds with gains in her short futures positions. ROI: ROI Impact: By implementing the hedge suggested by the calculator, Eleanor reduces her portfolio's volatility by an estimated 30%. If the S&P 500 experiences a 15% downturn, Eleanor's unhedged portfolio would lose $270,000 ($1.8M * 15%). However, with the hedge in place, her losses are significantly mitigated, potentially reducing the loss to around $189,000 (a 30% reduction), saving her approximately $81,000 in potential losses. Furthermore, maintaining her current allocation allows her to continue benefiting from potential market upside, albeit with reduced gains during bull markets. Description: Protect your hard-earned retirement savings from market volatility. Our Hedge Ratio Calculator helps you determine the optimal strategy to minimize portfolio risk and preserve your capital. Category: Client Service