TRUCKEE, Calif. — Year to date, the Sandamp;P 500 is up 16.09 percent with very low volatility. One question that I get frequently is what can investors with gains do to protect their portfolio? There are a variety of strategies that can be employed, and there are advantages and disadvantages to each one. There isn’t one way that’s better than another; it all depends on the investor, his or her goals, suitability and his or her portfolio. One thing is for sure, years of gains and savings can be wiped out in a very short period of time when there’s a rapid market decline like in 2008. Market declines can happen very rapidly and in response to events that are impossible to predict.One way is by using some form of tactical asset allocation by moving money from stocks to cash in times of uncertainty. There are professional managers who do this and there are a variety of long-short funds available. A long-short fund is a type of mutual fund where the manager will decide if he should be bullish on the market with long positions or bearish on the market with short positions and attempt to make money from price moves in either direction.Today, there are also a variety of ETFs and ETNs that will go up in value when the market declines. There are funds that are bearish — they short the Sandamp;P 500, short 2X the Sandamp;P, so they will go up when the market goes down. There are also short funds for other indexes as well, like the Dow, the Russell and the NASDAQ. The problem using them is that are designed to track the inverse of the market on a daily basis and will not track it exactly over longer time frames, so again you get into the timing issue of knowing when to buy one for a hedge and how long you’re going to hold it.Another good strategy is to use options. With an option you can get clearly defined protection just like buying insurance. By purchasing put options on the broad market or on the individual stocks in your portfolio, you can always know and control the worst case loss in your portfolio. One disadvantage to using options is the cost, but that cost can be offset by using a strategy known as a “collar,” where you sell a call option, then use the funds to purchase a put option. You limit your potential for gains by doing this, but can also control your exposure to risk.Kenneth Roberts is a Truckee based Registered Investment Advisor. Information on his money management service can be found at www.fusiontargetretirement.com or by calling 775-657-8065. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.