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For those who wish to hedge a portfolio against downside risk, Nate Pile suggests a pair of ETFs that benefit from a market decline. Here is the latest from his Nate's Notes.

"Although I would argue that much of the potential bad news has already been factored into stock prices, one of the mantras I have come to respect over the years is 'don't find the trend'... and the trend is currently down.

"Thus, I believe it would be foolish to not take at least a few cautionary steps with regards to protecting our portfolios until it becomes more clear just how bad things are going to get.

"As a result, I am recommending two 'short fund' ETFs as short-term investments -- ProShares UltraShort Dow 30 (AMEX: DXD) and the ProShares UltraShort QQQ (AMEX: QID). Both are designed to provide results, before fees and expenses, which correspond to the inverse of the performance of their respective indexes.

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Inverse ETFs: Hedging downside risk originally appeared on BloggingStocks on Sun, 03 Feb 2008 14:40:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>DXDETFsNate PileNate's NotesProSharesQIDshort fund ETFsSteven HalpernTheStockAdvisors.comUltraShort DowSun, 03 Feb 2008 14:40:00 EST