Comment by Fade_Dance

There are many options to hedge the known market risks today (as for hedging black swans, tail hedging is also an option, although more explicitly negative value adding long-term).

I'm assuming you are talking longer term.

A permanent allocation to gold is one option. These days it can also be done via overlays so that equity exposure can stay the same.

TIPS work as inflation protection. Move some bond exposure to TIPS.

CTA/trend following is a great addition to a portfolio when it comes to protecting against stagflationary scenarios. Again, this is fairly easy to access via ETFs these days.

How about international diversification? This is something even super conservative voices like Bogle would recommend. Again, easy to access via ETFs.

Another good idea if hedging is on the mind is stepping away from the market cap weighted indexes to some degree. Add some small-cap value for example.

There are other options as well that can be done on a portfolio level, but it can get more advanced from there.

The most important thing is to have a consistent framework that one can stick with for decades. Especially when it comes to having a truly diversified portfolio, it tends to be that unfortunately some people have a hard time handling it. If you are truly diversified you should always have assets in a portfolio that are performing poorly, and performance may be bad for entire decade-long market cycle or two. Ex: if trend is performing badly during a strong equity boom, it was protecting against lines that didn't happen to play out, but that doesn't mean that the realized situation nullifies the holistic diversification benefits.

Also, it gets more difficult if part of the equation is matching or exceeding S&P returns on an absolute basis. S&P has high returns but sees high drawdowns up to 50%, well more diversified approaches maybe less volatile and see more mild drawdowns. Because of that, usually most people would be better off with some mild leverage if they take a more diversified approach that switches out equity for less volatile assets like gold. Ex: 60/30/20/20/10 (equity/bonds/CTA/Gold/TIPS).