With inverse ETF’s you can get around many of the problems of short selling and options trading while also hedging your long positions. To put in simple terms, you can offset any loses in your long stock and ETF positions by using them as a hedge.
Since the market has enjoyed 30-40% gains since the March lows. The market seems to be running out of steam, as volume has dried up. Warren Buffet, the greatest investor in the world recently said that he “doesn’t see the “green shoots” Ben Bernanke and other bullish investors have spoken of in recent months. In fact, the billionaire investor believes the economic picture will grow darker before things improve. ” The government has shown that it will do anything to prop up the markets to bring back confidence. This confidence can only be propped up for so long.
If you believe in Warren Buffet and think the worst has yet to come, here are some inverse ETF’s to profit from the next leg down.
The ETF “DOG” which corresponds to the inverse of the daily performance of the Dow Jones Industrial Average index.
The ETF “SH” which corresponds to the inverse of the daily performance of the S&P 500 index.
The ETF “RWM” which corresponds to the inverse of the daily performance of the Russell 2000 index.
These ETF’s are just a select few of the products available to short the market. There are also inverse 2X and inverse 3X ETF’s which are more volatile but, provide bigger returns to bet against the market.