Monday, August 24, 2009
Hedge Your Housing Risk
The Economist reports that since June, retail investors have been able to hedge their housing risk through the purchase of MacroShares. MacroShares are tied to the value of the S&P/Case-Shiller home price index across ten urban areas. In the future, MacroShares plans to tie the products more closely to local markets rather than being based broadly across ten areas. MacroShares is courtesy of economists Robert Shiller and Karl Case.
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I dont think this works well as insurance because differences between areas within markets are almost as big as differences between markets.
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