Exactly how risky are mortgage and debt securities as hedges?

Posted by Elite Internet Technologies on December 27th, 2016

The securities industry is one of the biggest financial markets in the world. The quality of securities on the market is a subject of constant criticism and debate. Since the subprime catastrophe of 2007, mortgage securities have been under the spotlight. Debt securities came under severe criticism during the junk bond scandals of the late 1980s and 90s.

The problem with was this entirely negative image is that it is also almost entirely wrong. There are still securities on the market which are not Grade A, certainly. There are some securities which are basically still junk bonds. That said, the idea that all debt securities and mortgage securities on the market aren't safe is simply ridiculous. It is simply not true.

A triple-A rated security is about as good an investment as you can get, on any market. These securities have real value, with genuine income upside and future value built in. As a matter of fact, if you ask any financial expert about hedging strategies, the most likely response is triple-A rated securities.

When you're looking at hedge investments, high quality mortgage and debt securities do offer significant advantages. These financial products are always in demand. That, if nothing else, should be a good character reference for the true nature of this type of investment. In the extremely picky, highly cynical securities market, a "good investment" really does have to be a good investment.

However, let's not oversimplify:

The other critical component in securities investment is good quality financial advice.

You need experts on your side to help you manage your risk and ensure good returns on your investment.

You also need real-time monitoring of your hedge, to both minimize risk and ensure your investment assets are performing.

A good example of a company which provides these services is a company called United Capital Markets Inc., based in Denver. This is a full-service consultancy with many years of experience in high end hedging investment. Find out more about how they manage hedging, and for some useful baseline information regarding the hedging process in this market, visit their website here at http://ucm-inc.com/.  You'll be glad you did.