Sometimes it pays to go against the grain. Inverse exchange traded funds are an investment tool that allows you to do just that. An inverse or “short” ETF, provides the opposite performance of the benchmark it tracks. For example, if the market rises, then the inverse ETF would fall. On the other hand, if the market starts to decline, than the inverse ETF will increase in market value. 

      This is merely one investment strategy that an investor can implement to take advantage of a down market. With the idea of a recession looming over the global economy, the bearish investors of the financial world should consider taking such a position. The are several reasons why an individual investor would wish to short an index including the following:

• A long-term investor believes the market will fall, and wants to protect themselves from market decline.
• An investor wants to make money in a down market.
• A short-term investor wants to make money in a bearish market.

   Inverse ETF’s are believed, by many financial professionals, to be a much more cost effective investment then other actively managed mutual funds. Therefore, depending on market conditions, one would be able to lower your costs by utilizing ETF’s in your portfolio and use inverse ETF’s as a protective safety net or “AIR BAG.”

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