What is the key benefit of hedging investments?

Hedging investments primarily serves the purpose of managing potential losses. By utilizing various financial instruments or strategies, investors can protect themselves against unfavorable price movements in their assets. This means that while hedging does not eliminate risk entirely, it allows investors to reduce their exposure to certain types of risks, thereby providing a more stable investment outcome.

For example, if an investor holds a stock that they expect to decrease in value, they might buy a put option to hedge against this risk. If the stock does indeed fall, the loss on the stock can be offset by the gain from the put option. This protective approach is the essence of hedging; it helps investors navigate uncertainties in the market while maintaining their positions.

The other options suggest misleading outcomes. Guaranteeing profits or completely eliminating all risks is not feasible in the investment world, as all investments come with inherent risks and uncertainties. Additionally, hedging does not directly influence a company's market share; its primary focus is risk management rather than market position.