What is the best ETFs portfolio for a bear market?
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Please give an example of 5 to 7 ETFs portfolio and explain why they will hold better in a bear market
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Answer:
DOG its an etf that shorts stocks.
3CX4AYKZOTEX5CMUXKXGJ7LSDU at Yahoo! Answers Visit the source
Other answers
In a bear market an accelerated return note is probably the best. You get 5 times the down side, with a “cushion” on the up side. For example, you buy a 14 month note on the S&P with a cap of 50%, 5% cushion. If the S&P went down 5% in the 14 months, you would be up 25% (5 times 5)….if the S&P went down 12%, you would only be up 50% because that is the cap (5 time 12 is over 50%). On the other side, if the S&P went up 4%, you would not lose a penny, and get your investment back. If the S&P went up 10%, you would lose 5% of your funds…anything over that 5%. They also do the same type of notes for bullish people, but there is no type of “cushion” for a bull note. So the bear note, you are 5 to 1 on the “profit” and 1to 1 on the downside risk. The Bull notes are usually, 3 times the up side, and one times the downside. This is a 3to2 option strategy that is used. ETF’s will do the “exact same thing” but does not have to “extra return”. ETF’s are better in a bullish market because there is not a “cap” on how much you can make.
eshie
Great.... you're looking for investment advice from strangers that you can't verify their qualifications or motives. Don't look for the "easy way" to invest. You'll get burned. Do your homework. Read a ton of stuff. Make your own decisions. BTW: Did you know there are ETF's that are "bear" market instruments aiming at a 200% return on down markets (before internal fees and costs). This is not the stuff for newbe's (however).
Common Sense
As there is no uptick rule with ETFs I think it would be better to think about shorting strategies rather than going long in any ETF in a bear market. Whichever you choose I think you are still swimming against the current. I think you should rather ask which ETFs would loose less money than others in a bear market? I would say some non cyclicals, pharmaceuticals, cosmetics and the like.
Laszlo Fazekas
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