On 17 March 2025, The Personal View published: “Positioning for the Market Turmoil Ahead, 2025-2028.” That article opened with this warning:
“The March-June 2025 period will bring extreme market volatility, driven by geopolitical conflicts, economic instability, and shifting power dynamics. Immediate shocks are severe, while long-term consequences shape financial markets, trade flows, and capital allocation into 2028.”
That foresight was swiftly validated. By April, global markets were reeling: the VIX surged, geopolitics flared, and equities sold off aggressively as investor confidence faltered.
Key themes and forecasts from that March cautionary included
- A rearmament cycle is driving global defence spending higher
- Middle East instability, energy insecurity, and oil supply disruption; warning of Iran-Israel and Ukraine-Russia conflict
- The rise of cyberattacks and surveillance infrastructure as dominant investment themes
- A reiteration to accumulate gold, first recommended on 8 March 2021
Now, markets are near record highs, but complacency is visible, momentum is fading, and liquidity is thinning. July is fragile. The next wave of volatility is nearing.
What Makes the Market Vulnerable Now:
- Headline-driven shocks from geopolitical, regulatory, or domestic unrest
- Potential for flash crashes or algorithmic dislocations
- Cyberattacks or infrastructure disruptions that unsettle sentiment
- A breakdown in leadership or sentiment sparking fear-based trading
- Overstretched valuations lacking support
It’s time to rebuild protection, reduce fragility, and prepare for downside risk.
Downside Protection: Portfolio Insurance on the S&P 500
For global investors with equity exposure, especially those fully allocated, now is the time to consider derivative trades to hedge a sharp S&P 500 drawdown.
Four Portfolio Hedging Strategies:
Put Spread Collar
Buy a near-the-money put, sell a deeper one, and finance with an OTM call. A low-cost way to insure downside while capping upside.
Zero-Cost Put Spread
Buy a 3-5% OTM put and sell a 7-10% OTM put for limited-cost protection against moderate declines.
VIX Call Options
Purchasing near-term VIX calls (2-4 weeks out) helps hedge tail risk, as volatility typically spikes during equity stress.
SPX Ratio Put Spread
Buy one ATM put and sell two or more deeper OTM puts. Lower cost, but introduces risk below a second threshold, is useful in deep sell-offs.
These can be tailored to other global indices (Euro Stoxx 50, FTSE 100, Nikkei, JSE Top 40, etc.) correlated with U.S. equity direction.
Conclusion:
The market may look strong on the surface, but it’s skating on thin ice.
July is tactically vulnerable. Volatility returns when least expected. Now is the time to position defensively, protect gains, and prepare for a sharp risk repricing.
Have you started adjusting your investment strategy in anticipation of renewed volatility? Share your thoughts, questions, or alternative strategies in the comments below.
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1
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