Do you believe the current market rally is here to stay?
That belief would mean that despite two consecutive quarters of negative Gross Domestic Profit numbers and the Federal Reserve continuing to increase interest rates as a method to bring down inflation, which is at a level that we have not seen since the 1980s, we actually are not currently staring down the barrel of a recession.
There are economists and market participants currently on both sides of the argument of whether or not we are heading towards a recession.
I am not personally confident enough to invest based on where I think we are heading in the short term. But I still like to know what is available for me to buy if the tide seems to be turning one way or the other.
As I mentioned, I would like to give you a few ETFs that would make you money if the market turns negative. These ETFs are all inverse or leveraged funds, meaning they will experience contango if held for longer than one day. Lastly, I would also like to point out that these ETFs, if used correctly, could help investors hedge their portfolio’s against a market correction.
The first few I would like to mention are the basic inverse ETFs that track major indexes. The Direxion Daily S&P 500 Bear 1X Shares ETF (SPDN) tracks the S&P 500 and will increase in value daily if the S&P 500 goes lower.
For example, if the S&P 500 falls 1%, SPDN will increase by 1%. However, if the S&P 500 increases by 1%, SPDN will decrease by 1%. SPDN and every other ETF I mention today will only produce a near-exact correlation to its corresponding index on a one-day basis. Continue reading "ETFs For A Negative Market Turn"