4) Hedge ETFs
When the bulls are getting slaughtered by the bears, there’s no better place to take advantage of the carnage than with inverse ETFs. These are funds that move in the opposite direction of their respective benchmarks, and as such when a sector, broad market index, country or commodity market is plunging.
You can exact your revenge with inverse ETF weapons. There are a host of these funds available to investors. Some of the most popular are the ProShares Short S&P 500 (NYSE:SH), the leveraged ProShares UltraShort S&P 500 (NYSE:SDS) and the ProShares Short MSCI Emerging Markets (NYSE:EUM).
Money market funds, CDs, even currency funds such as the CurrencyShares Swiss Franc Trust (NYSE:FXF) represent safe havens for your money that can protect your wealth in times of turmoil. The dual goals when owning these funds is to
- preserve your capital in the safest possible asset classes and stave off any market losses, and
- preserve that capital until the smoke clears, and when all that remains is blood in the fiscal streets. It is at that point when you can come in and scoop up deals on battered assets that will be selling at ultra-deep discounts.