It's easy to make money when stock prices rise.
Just invest in one of the 5,000 stocks listed on major exchanges or one of the hundreds of exchange-traded funds (ETFs) that are already available – with more being added almost every day.
But if you want to make money when the stock market crashes, it's just as easy.
Maybe even easier.
Just buy shares in one or all of the four "investments" I'm going to tell you about today…
More Pain Means More Gain
Shorting strategies will allow you to cash in when stocks, bonds, or other assets fall in price.
Indeed, there are lots of ways to make money when things go down. But just knowing about the three most popular strategies to play price or market declines is enough for you to cash in on the next stock that plunges on disappointing earnings – or on the next bear market in blue chips.
Those three key "short-side strategies" are:
- Selling short, more commonly known as shorting
- Buying inverse ETFs
- Buying put options
Today we're going to look at inverse ETFs.
Grabbing Profits During a Stock Market Crash
When I talk to investors, one of my main messages is that "there's always a place to make money" – with any kind of asset… and in any kind of market.
And short-selling is a core piece of that belief.
In fact, investors who aren't at least considering short-side trades are missing major profit opportunities – in essence, leaving lots of money on the table.
ETFs are packaged products that trade all day like stocks.
You can buy them… sell them… and short them.
And there are hundreds to choose from.
Inverse ETFs are a category of exchange-traded funds that do the opposite of what an underlying portfolio or index does.
When markets fall, inverse ETFs rise in value. And the steeper the market drop, the bigger your profit.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.