Making money is the goal of every stock investor. Unfortunately, losing portfolio gains can happen just as quickly as they were earned. The fact that stocks are a risky venture means that you will need to find creative ways to protect your stock portfolio.

Since the market is rather volatile at times, such as now, investors stand to gain, or lose a lot of money. Protecting what is made is the only way to ensure that a portfolio maintains its value. There are several ways to approach the art of protecting a stock portfolio, some methods being more creative than others.

One of these creative ways is to purchase a put. A put is a contract that gives the investor the option of selling a stock within a specified time frame. The selling price is also predetermined, but the investor is not obligated to sell the stock. Rather, it is an option for the savvy investor that is not afraid to estimate and take the risk.

For the most part, a put involves an investor that estimates that the underlying asset will eventually decline in value. Profit is made when the investor sells the stock or decides to exercise the option. The investor basically takes the risk that the exercise price will be higher than the stocks value, and that the stock will not fall very far below the exercise cost while they own it.

Another popular way to protect a stock portfolio is to bet on the decline of the entire market. This is done by purchasing inverse exchange traded funds, or an ETF. To successfully invest in ETFs takes strategy, and an understanding of how profit can be gained from declining stock prices. Similar to mutual funds, ETFs enable investors to put diversified securities into their portfolios, therefore giving them a layer of protection when markets fall.

One of the benefits of the inverse ETF is that an investor can invest in a vast array of services and products. The act of investing in ETFs also offers the investor access to investment opportunities that are unavailable in long term investments. Investing in short term inverse ETFs means the investor will need to estimate the futures of stocks.

The investor purchases shares in the stock that is not predicted to fail. When using ETFs to protect a portfolio, the investor needs to have a firm grasp on all of the strategies involved with short term inverse ETF investments. Two other ways to protect a portfolio are through guaranteed variable annuities and asset reallocation. Though these two modes of protection definitely work, they do have some downsides.

The worst of the downsides is the knowledge that the estimated returns on these investments will likely be reduced compared to other investment options. This fact does not stop investors, nor does it mean that an investor will not profit. Most of the popular and creative ways to protect your stock portfolio involve risk, and lower profit gains, but they also prevent loss.