Let's say that the markets did, in fact, turn extremely bearish and you, being the wise investor you are, properly protected your capital and were stopped out of your positions. Now what?

My advice, assuming you don't short stocks or trade options, would be to shift your strategy toward equities that move in an inverse fashion, equities that rise as markets or other related indexes fall. Yes, these types of equities exist and yes, they are one of the easiest tools to use to profit from a down-trending market, sector, index, etc.

Inverse ETFs; Bear ETFs, or short ETFs are equities that move inversely to, or mirror a specific sector, index, other related ETF, or the like. For example, if the Dow Jones industrial average falls, Short Dow 30 Proshares (NYSEARCA:DOG), an inverse ETF that tracks the Dow, will move upward.

Some of these inverse ETFs also offer leverage to the investor as well, generally by multiples of two or three. As an example, if the S&P 500 falls 1%, ProShares UltraShort S&P 500 (NYSEARCA:SDS), an inverse ETF that mirrors the S&P 500 with twice the leverage, will rise 2%. (Please note that ETF movements are not entirely precise and may differ slightly from the actual index, fund, etc.)

Below is a list of inverse equity ETFs that will move upward when their tracked sector, market, or index falls. (A complete list of inverse ETFs can be found here.)

Symbol | Name | Tracks | Leverage | Inverse to | Average Volume |

MLPS | E-TRACS 1xMonthly Short Alerian MLP Infrastructure Total Return ETN | Alerian MLP Infrastructure Total Return Index | 1x | MLPI | 4,200 |

BRIS | Direxion Daily BRIC Bear 2X Shares | Bank of New York Mellon BRIC Select ADR Index | 2x | BRIL | 2,211 |

YANG | Direxion Daily China Bear 3X ETF | Bank of New York Mellon China Select ADR Index | 3x | n/a | 62,730 |

COWS | Daily Agribusiness Bear 3x Shares | DAXglobal Agribusiness Index | 3x | n/a | 8,686 |

RUSS | Daily Russia Bear 3x Shares | DAXglobal Russia Index | 3x | n/a | 27,472 |

SDOW | ProShares UltraPro Short Dow 30 Fund | Dow Jones Industrial Average | 3x | UDOW | 1,039,270 |

DXD | ProShares UltraShort Dow 30 | Dow Jones Industrial Average Index | 2x | DDM | 4,814,084 |

DOG | Short Dow 30 Proshares | Dow Jones Industrial Average Index | 1x | n/a | 931,634 |

SMN | ProShares UltraShort Basic Materials | Dow Jones U.S. Basic Materials Index | 2x | UYM | 1,598,292 |

SBM | ProShares Short Basic Materials | Dow Jones U.S. Basic Materials Index | 1x | n/a | 29,143 |

SZK | ProShares UltraShort Consumer Goods | Dow Jones U.S. Consumer Goods Index | 2x | UGE | 4,994 |

SCC | ProShares UltraShort Consumer Services | Dow Jones U.S. Consumer Services Index | 2x | UCC | 29,750 |

SKF | ProShares UltraShort Financials | Dow Jones U.S. Financials Index | 2x | UYG | 2,542,455 |

SEF | ProShares Short Financials | Dow Jones U.S. Financials Index | 1x | n/a | 347,445 |

RXD | ProShares UltraShort Health Care | Dow Jones U.S. Health Care Index | 2x | RXL | 3,531 |

SIJ | ProShares UltraShort Industrials | Dow Jones U.S. Industrials Index | 2x | UXI | 14,583 |

DUG | ProShares UltraShort Oil & Gas | Dow Jones U.S. Oil & Gas Index | 2x | DIG | 2,070,267 |

DDG | Short Oil and Gas Proshares | Dow Jones U.S. Oil & Gas Index | 1x | n/a | 15,856 |

TLL | ProShares UltraShort Telecommunications | Dow Jones U.S. Select Telecommunications Index | 2x | LTL | 3,300 |

SSG | ProShares UltraShort Semiconductors | Dow Jones U.S. Semiconductors Index | 2x | USD | 51,133 |

REW | ProShares UltraShort Technology | Dow Jones U.S. Technology Index | 2x | ROM | 22,411 |

SDP | ProShares UltraShort Utilites | Dow Jones U.S. Utilities Index | 2x | UPW | 7,273 |

FXP | ProShares UltraShort FTSE China 25 | FTSE/Xinhua China 25 Index | 2x | XPP | 631,697 |

YXI | ProShares Short FTSE China 25 | FTSE/Xinhua China 25 Index | 1x | n/a | 20,278 |

SICK | Daily Healthcare Bear 3X Shares | Health Care Select Sector Index | 3x | n/a | 623 |

INDZ | Direxion Daily India Bear 2X Shares | Indus India Index | 2x | INDL | 4,647 |

GASX | Direxion Daily Natural Gas Related Bear 2x ETF | ISE-REVERE Natural Gas Index | 2x | n/a | 9,389 |

KRS | ProShares Short KBW Regional Banking | KBW Regional Banking Index | 1x | n/a | 32,691 |

MATS | Daily Basic Materials Bear 3X Shares | Materials Select Sector Index | 3x | n/a | 12,043 |

BZQ | ProShares UltraShort MSCI Brazil | MSCI Brazil Index | 2x | UBR | 167,516 |

EFZ | Short MSCI EAFE Proshares | MSCI EAFE Index | 1x | n/a | 379,609 |

EFU | ProShares UltraShort MSCI EAFE | MSCI EAFE Index | 2x | EFO | 172,983 |

DPK | Developed Markets Bear 3x Shares | MSCI EAFE Index | 3x | DZK | 106,459 |

MFSA | iPath Short Enhanced MSCI EAFE Index ETN | MSCI EAFE Index | 2x | MFLA | 759 |

EUM | Short MSCI Emerging Markets Proshares | MSCI Emerging Markets Index | 1x | n/a | 388,883 |

EDZ | Emerging Markets Bear 3x Shares | MSCI Emerging Markets Index | 3x | EDC | 3,221,703 |

EEV | ProShares UltraShort MSCI Emerging Markets | MSCI Emerging Markets Index | 2x | EET | 651,305 |

EMSA | iPath Short Enhanced MSCI Emerging Markets Index ETN | MSCI Emerging Markets Index | 2x | EMLB | 3,708 |

EPV | ProShares UltraShort MSCI Europe | MSCI Europe Index | 2x | UPV | 374,830 |

EWV | ProShares UltraShort MSCI Japan | MSCI Japan Index | 2x | EZJ | 14,452 |

SMK | ProShares UltraShort MSCI Mexico Investable Market | MSCI Mexico Investable Market Index | 2x | UMX | 5,545 |

JPX | ProShares UltraShort MSCI Pacific ex-Jpn | MSCI Pacific ex-Japan Index | 2x | UXJ | 1,184 |

TOTS | Daily Total Market Bear 1X Shares | MSCI US Broad Market Index | 1x | n/a | 1,597 |

BIS | ProShares UltraShort Nasdaq Biotechnology | NASDAQ Biotechnology Index | 2x | BIB | 2,066 |

QID | ProShares UltraShort QQQ | NASDAQ-100 Index | 2x | QLD | 8,613,034 |

PSQ | Short QQQ Proshares | NASDAQ-100 Index | 1x | n/a | 1,347,669 |

SQQQ | ProShares UltraPro Short QQQ Fund | NASDAQ-100 Index | 3x | TQQQ | 3,139,936 |

HDGE | AdvisorShares Active Bear ETF | None | 1x | n/a | 237,813 |

DUST | Direxion Daily Gold Miners Bear 2x Shares | NYSE Arca Gold Miners Index | 2x | NUGT | 243,422 |

SOXS | Direxion Daily Semiconductor Bear 3X Shares | PHLX Semiconductor Index | 3x | SOXL | 171,298 |

ERY | Daily Energy Bear 3x Shares | Russell 1000 Energy Index | 3x | ERX | 5,191,239 |

FAZ | Direxion Financial Bear 3X Shares | Russell 1000 Financial Services Index | 3x | FAS | 22,600,787 |

SFK | ProShares UltraShort Russell 1000 Growth | Russell 1000 Growth Index | 2x | UKF | 18,440 |

BGZ | Direxion Large Cap Bear 3X Shares | Russell 1000 Index | 3x | BGU | 4,050,303 |

ROSA | iPath Short Extended Russell 1000 TR Index ETN | Russell 1000 Index | 3x | ROLA | 2,309 |

RETS | Direxion Daily Retail Bear 2x Shares | Russell 1000 Retail Index | 2x | RETL | 5,108 |

TYP | Direxion Daily Technology Bear 3X Shares | Russell 1000 Technology Index | 3x | TYH | 936,638 |

SJF | ProShares UltraShort Russell 1000 Value | Russell 1000 Value Index | 2x | UVG | 3,044 |

SKK | ProShares UltraShort Russell 2000 Growth | Russell 2000 Growth Index | 2x | UKK | 19,630 |

TZA | Direxion Small Cap Bear 3X Shares 2013 Russell 2000 | Russell 2000 Index | 3x | TNA | 30,642,979 |

RWM | Short Russell 2000 Proshares | Russell 2000 Index | 1x | n/a | 2,576,661 |

TWM | ProShares UltraShort Russell 2000 | Russell 2000 Index | 2x | UWM | 5,786,022 |

SRTY | ProShares UltraPro Short Russell2000 Fund | Russell 2000 Index | 3x | URTY | 1,473,805 |

RTSA | iPath Short Extended Russell 2000 TR Index ETN | Russell 2000 Index | 3x | RTLA | 18,991 |

SJH | ProShares UltraShort Russell 2000 Value | Russell 2000 Value Index | 2x | UVT | 6,025 |

TWQ | ProShares UltraShort Russell 3000 | Russell 3000 Index | 2x | UWC | 5,895 |

SDK | ProShares UltraShort Russell MidCap Growth | Russell MidCap Growth Index | 2x | UKW | 2,927 |

MWN | Direxion Daily Mid Cap Bear 3x Shares | Russell Midcap Index | 3x | MWJ | 50,984 |

SJL | UltraShort Russell Mid Cap Value Proshares | Russell MidCap Value Index | 2x | UVU | 2,785 |

FSA | FactorShares 2X: TBond Bull/S&P 500 Bear | S&P 500 Bull/TBond Bear Index | 2x | n/a | 2,039 |

SH | Short S&P 500 Proshares | S&P 500 Index | 1x | n/a | 8,447,722 |

SDS | ProShares UltraShort S&P 500 | S&P 500 Index | 2x | SSO | 44,456,961 |

SPXU | ProShares UltraPro Short S&P 500 | S&P 500 Index | 3x | UPRO | 17,296,178 |

RSW | Rydex Inverse 2x S&P 500 ETF | S&P 500 Index | 2x | RSU | 121,478 |

SFSA | iPath Short Extended S&P 500 TR Index ETN | S&P 500 Index | 3x | SFLA | 28,417 |

BXDB | Barclays Short B Leveraged Inverse S&P 500 Total Return Index | S&P 500 Total Return Index | 1x | n/a | 2,781 |

BXDC | Barclays Short C Leveraged Inverse S&P 500 Total Return Index | S&P 500 Total Return Index | 2x | BXUC | 9,113 |

LHB | Direxion Daily Latin America Bear 3x Shares | S&P Latin America 40 Index | 3x | LBJ | 39,345 |

MZZ | ProShares UltraShort MidCap400 | S&P MidCap 400 Index | 2x | MVV | 347,398 |

MYY | Short MidCap 400 Proshares | S&P MidCap 400 Index | 1x | n/a | 131,892 |

SMDD | ProShares UltraPro Short Mid Cap 400 Fund | S&P MidCap 400 Index | 3x | UMDD | 251,167 |

SBB | Short Small Cap 600 Proshares | S&P SmallCap 600 Index | 1x | n/a | 65,108 |

SDD | ProShares UltraShort SmallCap 600 | S&P SmallCap 600 Index | 2x | SAA | 23,133 |

SRS | ProShares UltraShort Real Estate | Dow Jones U.S. Real Estate Index | 2x | URE | 972,021 |

REK | ProShares Short Real Estate | Dow Jones U.S. Real Estate Index | 1x | n/a | 38,664 |

DRV | Direxion Daily Real Estate Bear 3x Shares | MSCI US REIT Index | 3x | DRN | 251,152 |

ProShares Short S&P 500 (NYSEARCA:SH) and Short Dow 30 Proshares are two of my favorite inverse ETFs to use when betting against the overall market. As their names imply, ProShares Short S&P 500 and Short Dow 30 Proshares move inversely to the S&P 500 index and the Dow Jones industrial average, respectively. These ETFs can also be very useful when using technical analysis to try and predict market trends.

For example, and illustrated by the graph below, ProShares Short S&P 500 failed to fall through its support level at $40.00 for the latter half of 2011. Conversely, the S&P 500 was unable to break out and begin a significant positive trend during this time. As 2012 began, however, ProShares Short S&P 500 fell below resistance, marking a new downtrend for the ETF. As most of us know, this trend, though negative for ProShares Short S&P 500, marked a significant continuation point for the positive trend of the S&P 500. (The duration of this trend, of course, is still very much in question.)

*Click to enlarge:*

In summary, though they should generally not be used for long term investing, inverse ETFs give investors a great amount of flexibility by allowing them to profit from a bearish market, sector, index or the like, without shorting or trading options.

Next we will look at commodities based investments that can provide safety for investors in an otherwise unsafe bear market.

**Disclosure: **I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

**Additional disclosure:** The use of inverse ETFs is generally recommended as a short term investment strategy only.