Foul Weather Fund
What is a Foul Weather Fund?
How Does a Foul Weather Fund Work?
Capable of hedging the risks of bear markets with the potential to even buck a downward trend, foul weather funds generally comprise investments that maintain a solid market value and display narrower price fluctuations. Such items include stable blue chip stocks and stocks that consistently correlate inversely with the stock market. Foul weather funds are also likely to contain fixed-income items, including bonds, which hold or increase in value due to declining interest rate levels that are characteristic of bear markets.