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David Fry
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David Fry writes a subscription newsletter focused on technical analysis of exchange-traded funds, called ETF Digest (www.etfdigest.com). Dave founded the ETF Digest in 2001 and was among the very first to see the need for a publication that provided individual investors with information and... More
My company:
ETF Digest
My blog:
Dave's Daily
My book:
Create Your Own ETF Hedge Fund, a DIY ETF Strategy for Private Wealth Management.
  • TOP 10 INVERSE EQUITY ETFs  0 comments
    Feb 27, 2012 10:43 AM | about stocks: SH, RWM, DOG, PSQ, EUM, EFZ, SEF, SBB, MYY, KRS

    There have been two bear markets in the past decade which is a first since the Great Depression. Investors need to protect themselves without necessarily speculating using too much leverage. Inverse ETF issues allow even retail investors and financial advisors the tools with which to hedge long equity positions. These issues allow for more sophisticated strategies including modest long/short strategies. In our opinion this is more easily done with these products versus more complex products like options and futures. The latter can be off-putting and time consuming to implement and manage for many investors. Also for retirement accounts shorting and/or using other tools are unavailable.

    Understanding how these issues operate and perform is another issue facing investors. Firstly, stock market volatility may and has affected precise tracking. Further, the daily structure also may give rise to compounding issues which could also negatively affect precise index tracking. Therefore, sometimes without careful management of your positions, these products may not deliver what you would normally expect intuitively.

    In our opinion, this makes timing and technical analysis all the more important as to when to use these products or not.

    We're not ranking these ETFs favoring one over another since what's popular or working is both situational and temporary. Although we may use any of these in ETF Digest portfolios it's not our intention to recommend one over another.


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