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Saturday, October 20, 2012

ETF Proxy Shorting the Market

I can safely say that shorting at the right time, right place, can yield huge gains.  However, math isn't on your side.  In post "this time its different", when the market falls, valuations drop around 50%, but gains are over 100%.   To properly short and gain valuations requires a commitment of time and careful positioning.

I do not have the time, nor the desire to embrace shorting the market as I did in 2006-November 2008. (I couldn't short Dec 2008 to march 2009, I didn't have the guts)

Aside from simply buying fixed income, which by the is the safest play normally, there is an alternative.
There is an ETF called HDGE that manages active shorting.  Meaning, they change their composition and try to remain nimble.  The fund was made public in 2011, and has wiggled around since then.  It's valuation isn't impressive.  Then again, the SPX has moved from 1300 to 1450 in the same time period, (up 11%).

So purchasing HDGE is pretty risky.  But I wanted to share with readers as I am buying some shares the last two weeks, and I'll follow up with some posts as the market develops.

HDGE is available recently around $20.50, I can reference this post in the future.

To find out more about HDGE, here are some handy links.

HDGE fact sheet, video, and current shorting macro allocation.

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