The Downside Bets With Inverse ETFs

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May 27, 2009 12:16pm NYSE:DOG NYSE:PSQ

humor“Don’t be fooled by bear market rallies, which are sharp, short-lived and, in some cases, extremely powerful,” says Martin Weiss. In his The Safe Money Report, he looks at inverse ETFs.

“Bear market rallies prompt short-sellers to panic, bears to mellow, bulls to come out of hiding, and Washington to declare ‘the worst is over.’ That’s precisely what’s happening today.  But don’t be fooled!

“So our targets for this bear market are unchanged: 5000 on the Dow, 500 on the S&P 500, and 850 on the Nasdaq. Meanwhile, here are some of the best investments for protection and profit as the bear market resumes:……

……”The Short Dow30 ProShares (NYSE: DOG) inverse ETF is designed to rise 1% for every 1% decline in the Dow Jones Industrial Average.

“The Short QQQ ProShares (NYSE: PSQ) is an inverse ETF gains 1% for every 1% decline in the Nasdaq-100 Index, packed with major technology and biotech stocks prone to plunge.

“The Short Financials ProShares (NYSE: SEF) is an inverse sector ETF that targets the Dow Jones U.S. Financials Index, also designed to gain approximately 1% for every 1% decline in that index of banks, brokers, and insurance firms.”

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