hedge

For the past two years, the relationship between the dollar, stocks and gold was strong. When the dollar dropped, stocks and gold rose, and vice versa, nearly all the time. But since New Year's Day, that link has completely vanished, which is terrible news for the gold bugs.

For investors, fear of losing money in the stock market is finally giving way to the reality that they may actually be losing money in low-yielding investments. So the move back to stocks is underway. But the key is do so safely. Here's some timely advice.

Gold is on a record bull run, up from $328 in 2002 to $1,375 an ounce today. What caused that steep rise wasn't any inherent increase in gold's value to society, but a clever marketing scheme that allowed it to be traded easily without the hassle of physical delivery: The SPDR Gold ETF.

With fear about the future and mistrust of government on the rise, more investors are buying gold. But they should tread with caution: Gold bugs pitch the precious metal as a safe economic hedge, but the sellers' shenanigans could cost you a bundle.

Goldman Sachs is facing another SEC inquiry into its handling of a collateralized debt obligation, this time involving a security called Hudson Mezzanine, which was based on low-quality subprime mortgages. Goldman sold the CDOs to investors, then bet against them.

One of the biggest risks to the world's financial health is the $1.2 quadrillion derivatives market. It's complex, it's unregulated, and it ought to be of concern to world leaders that its notional value is 20 times the size of the world economy.

Oil demand is still soft following the recession, but prices remain high. Investors' use of oil as an alternative investment and a hedge against a decline in the dollar play an important role.

Hedging fuel costs sounds confusing, but it's nothing new. Some airlines, like the budget model Southwest, have managed to claim a profit in no small part because their masters were clever enough to buy most of its fuel when it was still sensibly priced. That can work out really well if gas prices...