Originally Posted By: Tim
Originally Posted By: Redrum
I do need to look into how to investing negatively (like I said I don't even know the correct term here) because I feel a lot of companies are way over priced and set to go down the tubes.

I think you mean shorting. It is when you borrow a number of shares, and have to pay the shares back, so you hope the share prices drop and you can pay off the loan cheaper than you took it for.


Yep, you want to be "short the market". The easiest way to do that is with the "short ETF" funds, which take all the effort out of it. They use derivative instruments to let you be double or triple short (or long - the opposite). Google for "S&P triple short ETF" for an example.

Now, one problem with this, in my mind, is that prices are up due to all this money printing we've got going on. That could continue indefinitely, so that the market could keep soaring higher in dollar terms because those dollars are worth less for every one they print. So the *real* value of the market can go down while the *nominal* value goes up. That's what's been happening the last several years, in fact. Since market shorts are based on *nominal* value (that is, dollars) you can be double screwed. That's why I like the double and triple gold ETFs (long - betting that gold will continue to rise) for "gambling" and physical gold and silver for what's coming.

Jim


Edited by TigerJimmy (08/02/2013 16:16)