ETFs That Short the Market: Some of The Best Inverse ETFs (For 2021)
ETFs That Short the Market are funds that benefit from the stock market dropping.
Otherwise known as inverse or bearish ETFs, these funds rise in value during a bear market and fall during a bull market.
How most inverse ETFs work is through futures contracts. Let’s say you have a financial instrument (like a stock) which you think will go down a lot. A futures contract lets you set a price to buy/sell the stock at a future date.
Why Inverse ETFs?
An inverse fund provides investors with a diversified way to short the stock market.
If you make a bet that’s wrong on an individual stock, you’ll lose a whole bunch of your investment. However, if you have an ETF that holds hundreds of stocks, one wrong pick won’t affect it too much.
Who Should Buy Inverse ETFs?
You should only purchase inverse ETFs if you believe the stock market will drop significantly and very soon.
On top of that, you should probably only allocate a small part of your portfolio to inverse ETFs (it’s increasingly harder to time the market based on past performance).
to learn how to decide which ETFs to Buy!!