Can inverse ETFs make you money in a shaky market?

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Inverse ETFs let investors bet against investments without short\u002Dselling — but the risks are significant

But with the S&P 500 index recently sliding off record highs, and given persistent concerns about inflation, many prudent investors are looking to plan for the worst while still hoping for the best

That can be an enticing proposition, not just for professional traders but also for regular everyday investors and retirement savers who want an uncomplicated way ofCase in point: the Horizons BetaPro S&P/TSX 60 Inverse ETF , one of the more popular inverse ETFs for Canadian investors. In this way, inverse ETFs can provide short-term insurance on any long exposure you might be worried about.The appeal is simple: they allow everyday investors like you and me to profit from a downward movement in a wide variety of markets.Article content

Shorting positions require an investor to own a margin account, which basically means you’re investing with borrowed money. Options, meanwhile, are fairly complicated for everyday investors.and clicking the “buy” button — just as you would with a stock.There’s a simple reason why I’ve emphasized the short-term benefits of inverse ETFs: They have virtually no long-term benefits.

 

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