One of the touted benefits of ETFs is the ability to short them without worrying about the rally. However, for retail investors, shorting ETFs is difficult if trading volume is not in the top 10. Your online broker may reject your short sale order.
On top of that for the IRA and 401K market, shorts are not allowed by law. So if you fall into that category and you’re a baby boomer, how are you going to protect your portfolio? The solution is to buy Inverse ETFs. Inverse ETFs allow you to short simply by going long. So what does an inverse ETF do? An inverse ETF rises when the stock index or market index it is based on falls and falls when the stock index or market index rises.
Simple, the relationship between the Inverse ETF and the index on which it is based is negative. Then you can also invest in short Ultra Leverage ETFs. The ratio of the Ultra Leverage Short ETF is a negative multiple of the index. For example, the index may drop 5 points, but the Ultra Leverages Short ETF will rise 15 points if the multiple is -3.
Inverse ETFs can give your portfolio much more flexibility. If you really want to master the art of investing and make 2010 your investing success story, you should take a look at Chris Rowe’s Inner Strength System. This is a complete system of investing in stocks, options and ETFs explained step by step. You can try it for 30 days risk-free and see if it works for you. Chris Rowe had used this very system to make a fortune in the stock market!
