Definition of Macro Hedge

A macro hedge is an investment method that involves making investment moves that will offset the risk of an asset, or a group of assets, in a portfolio. Macro investors are investors that have vested interest in international markets. They can use a macro hedge to balance their portfolio in times of international economic downturn. For example, buying and selling a combination of short term and long term stock can reduce the risk a serious financial loss in the event of a market crash. The idea is to create assets in the portfolio that would offset loss that would be created should another asset falter.

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