1 Answers: Is there such thing as hedging career risk with your investments?


Background: I am a 26 year old 3rd year law student, no debt, and have 290k in my Roth IRA. I have been doing well in the market during law school. I was up 74% in 2017 and am up 45% YTD in 2018.

I am going to go work for a top notch law firm in NYC in about a year that pretty much exclusively does finance. All of its client are big banks, hedge funds, private equity firms, etc.

Once I start there in Oct 2019, I will have major trading restrictions such as notification the firm prior to trading to check for conflicts, 6 month holding period on equities, etc. I’ll be making 200k a year before taxes and COL in NYC. I’ll be able to roll 20k of the 401k plan (post tax dollars) into my Roth IRA.

Would it be prudent as an investor to short or buy puts in XLF? This would be to hedge my career risk of working for a firm that only does finance and which business booms when Wall St booms.

Also I’m not looking forward to having trading restrictions. One of the things I like about trading/investing is that you can bail out of an investment if you find out that you are wrong/change your mind.

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Anonymous 6 months 1 Answer 70 views 0

Answer ( 1 )

  1. Yes good idea. If you are in a high paying job then you should be putting aside an amount for tax free investing as you go. If you continue to do this and invest wisely over the long term, ensuring a diverse portfolio including a good ETF like Vanguard, then you should do very very well over the long term.

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