by Rick Nason, PhD, CFA
We have all heard the story about when the best time to plant a tree is – as soon as possible. Waiting to plant a tree only delays the time it takes for the tree to reach maturity.
The same can be said for when is the best time to implement a hedging strategy – as soon as possible. Yes – it is true that rates may move favourably later, but more often than not they don’t. Yes – it may be true that hedging costs have gone up, and the horses have already left the barn, but without the discipline to put the hinges back on the barn door, it will not be possible to corral the horses in the barn if the barn door is not repaired and the horses do return – besides, there are likely pigs and other animals that still need shelter.
Just as right now is always the best time to plant a tree, right now is generally always the best time to ensure that you have a conscious hedging plan in place (which by the way, may or may not involve the use of financial products).
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