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3 Bear Market Funds to Profit From Pain

It's starting to look like a good time to target some bearish exposure. We look at three funds that are right for the job.

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The idea of making money in stocks no matter which direction the market is heading sounds like some kind of solicitation to buy into the latest investment scheme.

Stock market report with bull and bear 630

But you don’t have to use questionable tactics or be a short seller or options trader to make money in a bear market. Nor do you have to bet the farm on a major market correction.

Instead, you can just buy bear market funds.

Bear market funds — which typically go short stocks, use options or find other ways of betting against the market — can be a smart way of adding diversity to a portfolio when it appears that a bull market is nearing its end.

With that said, timing is crucial when betting against the market. So is now a good time to buy bear market funds? The major stock indices keep hitting all-time highs, investors seem to think of bad news only as opportunities to buy on dips, and August is historically one of the worst months, on average, for stocks. Most would agree that a significant correction is overdue, the current bull market is much closer to the end than the beginning, and Tuesday certainly fueled some worries across Wall Street.

Although hindsight will only confirm the best timing to buy, now is as good of a time as any to at least educate yourself on expanding your diversification options. Here are three bear market funds worth your consideration.

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