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3 Funds to Arm Yourself for an Awful August

Seasonality's ugly side tends to come out this month. Be prepared.

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ProShares UltraShort S&P500

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With the S&P 500 teetering at overhead resistance levels — namely, 1,690 — a hedge on the benchmark index makes sense.

The average investor is able to “short” the market (and then some) by buying the ProShares UltraShort S&P500 (SDS). The SDS fund moves inversely to the S&P 500 at a 2-to-1 ratio, meaning that the fund will go up about 2% for every 1% decline in the S&P 500.

This approach to hedging a lofty market can help to offset potential losses in other areas of your portfolio, which is how the professional money managers hedge their positions ahead of market turmoil.

We’re currently expecting SDS to move to $39 over the next month or so.

Article printed from InvestorPlace Media, http://investorplace.com/2013/07/3-funds-to-prep-yourself-for-an-awful-august/.

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