Types of investments with built-in puts or similar safety features
"An index annuity is almost the same as Indexed Universal Life, except the equity-index annuity is an investment with a guaranteed minimum return, with sometimes a higher return that is a function of the gain in the stock market, but is not associated with a life insurance policy.  After a time, you can convert the EIA to a lifetime income (the annuity part) or just cash it out.  They often are very complicated, but are constructed by combining bonds with index options (puts) just like indexed universal life. Unfortunately these tend to have high fees and/or commissions, and high (early) surrender charges, which can make them a poor investment.  Of course you could just ""roll your own"" by buying bonds and puts FINRAS bulletin on EIAs, pdf warning. Here's a description of one of these securities: pdf." Many mutual funds include such mechanisms. However, the higher fees for those funds (when compared to simple index funds) may cancel out any improvement the hedging strategy offers.
LEGEAR Australia is the leading supplier of the Law Enforcement, Military, Public Safety, Hunting and Outdoor products in Australia and New Zealand. It has built a reputation on providing the highest quality products, offering exceptional service and on time delivery since 1999. Private Equity is simply some type of an investment company, which is owned in a way not accessible to the public. ie: Warren Buffet runs Berkshire Hatheway, which is an investment company which itself is traded on the New York Stock Exchange. This means that anyone can buy shares in the company, and own a small fraction of it. If Warren Buffet owned all the shares of Berkshire Hatheway, it would be a Private Equity company. Note that 'Equity' refers to the ownership of the company itself; a private investment company may simply buy Bonds (which are a form of Debt), in which case, they would not be technically considered a 'Private Equity' company. A Hedge Fund is a very broad term which I don't believe has significant meaning. Technically, it means something along the lines of an investment fund (either public or private) which attempts to hedge the risks of its portfolio, by carefully considering what type of investments it purchased. This refers back to the meaning of 'hedge', ie: 'hedging your bets'. In my opinion, 'Hedge Fund' is not meaningfully different from 'investment fund' or other similar terms. It is just the most popular way to refer to this type of industry at the present time.  You can see the trend of using the term 'investment fund' vs 'hedge fund' using this link: https://trends.google.com/trends/explore?date=all&q=hedge%20fund,investment%20fund Note that the high-point of the use of 'hedge fund' occurred on October 2008, right at the peak of the global financial crisis. The term evokes a certain image of 'high finance' / 'wall-street types' that may exploit various situations (such as tax legislation, or 'secret information') for their own gain. Without a clear definition, however, it is a term without much meaning. If you do a similar comparison between 'hedge fund' and 'private equity', you can see that the two correlate very closely; I believe the term 'private equity' is similarly misused to generally refer to 'investment bankers'. However in that case, 'private equity' has a more clear definition on its own merits. No, it's not all long-term capital gain.  Depending on the facts of your situation, it will be either ordinary income or partially short-term capital gain.  You should consider consulting a tax lawyer if you have this issue. This is sort of a weird little corner of the tax law.  IRC §§1221-1223 don't go into it, nor do the attendant Regs.  It also somewhat stumped the people on TaxAlmanac years ago (they mostly punted and just declared it self-employment income, avoiding the holding period issue).  But I did manage to find it in BNA Portfolio 562, buried in there.  That cited to a court case Comm'r v. Williams, 256 F.2d 152 (5th Cir. 1958) and to Revenue Ruling 75-524 (and to another Rev. Rul.).  Rev Rul 75-524 cites Fred Draper, 32 T.C. 545 (1959) for the proposition that assets are acquired progressively as they are built.  Note also that land and improvements on it are treated as separate assets for purposes of depreciation (Pub 946). So between Williams (which says something similar but about the shipbuilding industry) and 75-524, as well as some related rulings and cases, you may be looking at an analysis of how long your property has been built and how built it was.  You may be able to apportion some of the building as long-term and some as short-term.  Whether the apportionment should be as to cost expended before 1 year or value created before 1 year is explicitly left open in Williams.  It may be simpler to account for costs, since you'll have expenditure records with dates. However, if this is properly ordinary income because this is really business inventory and not merely investment property, then you have fully ordinary income and holding period is irrelevant.  Your quick turnaround sale tends to suggest this may have been done as a business, not as an investment. A proper advisor with access to these materials could help you formulate a tax strategy and return position.  This may be complex and law-driven enough that you'd need a tax lawyer rather than a CPA or preparer.  They can sort through the precedent and if you have the money may even provide a formal tax opinion.  Experienced real estate lawyers may be able to help, if you screen them appropriately (i.e. those who help prepare real estate tax returns or otherwise have strong tax crossover knowledge). The original option writer (seller) can close his short position in the contracts he wrote by purchasing back matching contracts (i.e. contracts with the same terms: underlying, option type, strike price, expiration date) from any others who hold long positions, or else who write new matching contract instances. Rather than buyer and seller settling directly, options are settled through a central options clearing house, being the Options Clearing Corporation for exchange-listed options in the U.S. See also Wikipedia - Clearing house (finance). So, the original buyer of the put maintains his position (insurance) and the clearing process ensures he is matched up with somebody else holding a matching obligation, if he chooses to exercise his put. I also answered a similar question but in more detail, here. For the type of market neutrality you desire, free from crash risk, it's best to hedge the shares with covered calls when implied volatility is expensive and puts when implied volatility is cheap with the nearest at the money expirations.  A put only strategy can be very expensive and should only be used with the longest term options available since they can cost many tens of % per year. Securities become almost perfectly correlated during a crash; therefore, market crash risk of one security is essentially equal to the market crash risk, so hedging the security itself makes a position market neutral for crash risk. This strategy will have intermittent opportunity cost risk in the form of slower returns during market expansion to pay for smaller losses during a crash; however, the expected long run return hedged this way should be greater than the underlying's expected long run return with less volatility. I think a larger issue is that you're trying to do market timing. Whether you had a large or small amount of money to invest, no one wants to put the money in to watch it go down.  You can't really predict if prices in a market or security will go up in six months (in which case you want to put all your cash in now), of if it will go down (in which case you'd want to wait until the bottom), or if it will skitter around (in which case you'd want to only buy at the bottoms).  Of course, if you're magic enough to nail all of those market conditions, you're a master finance trader and will quickly make billions. If you're really concerned with protecting your money and want to take some long positions, I'd look into some put options. You'll of course pay the fees for those put options, but they'll protect your downside.  Much of this depends on your time horizon: at the age of 35, someone can expect to see ~6 more recessions and perhaps ~30 more market corrections before retirement. With that big of a time range, it's best to avoid micro-optimizing since that tends to hurt your performance overall (because you won't be able to time the market correctly most of the time).  One thing that's somewhat reasonable, if you have the stomach for it, is to not buy at somewhat-obvious market highs and wait for corrections. This isn't fool proof by any means, but as an example many people realized that US equities basically were on a ~5 year up run by December 2014. Many people cashed out those positions, expecting that a correction would be due. And around late summer of 2015, that correction came. For those with patience, they made ~15% with a few mouse clicks.  Of course many others would have been waiting for that correction since 2010 and missed out on the market increases.  Boiled down: Buy puts on stock holdings buy puts on indexes  look at volatility etfs and silver/gold etf s. Calling a market top is hard people hVe tried for 8 years now.  90 of protection via options expires worthless.  Who knows if we have another crash. I don't call tops or bottoms if we start falling then I'll look at protection and play the downside You can buy out of the money put options that could minimize your losses (or even make you money)  in the event of a huge crash. Put options are good in that you dont have to worry about not getting filled, or not knowing what price you might get filled with a stop-loss order, however, put options cost money and their value decays over time. It's just like buying insurance, you always have to pay up for it.