Nonstop Profits With This Simple Investment

From the Baltimore Clubhouse – Recently, a friend of mine moved back to her home country of Australia for the holidays.

Just days after returning Down Under, she shared a video of herself at the beach. (The winter and summer seasons are reversed south of the equator, so it’s summer there.)

I was irritated. When you’re braving the winter cold, being reminded that others are basking in the warm glow of the sun is a bit unpleasant.

But while it’s easy to be bitter about one’s own circumstances, it’s also easy to forget what control we have over those circumstances.

Let me explain…

While we can’t change the seasons, we can change our relationship with them. In the case of my friend, she simply bought a plane ticket.

Likewise, investors who are braving the “winter” that is this current market correction should broaden their perspective.

Just as there’s always a summer season somewhere in the world, there is always a bull market.

You just have to find it.

But unlike taking a plane to Australia, you may not know just how to change your circumstances – or how to find moneymaking opportunities outside of the stock market.

And what if the doomsayers are correct? What if this market winter becomes a full-fledged blizzard?

Here’s the common temptation…

You can withdraw your capital from the market and stash it away under your mattress until it all settles down.

Or you can do something proactive.

For example, one way to profit on the downward momentum of a market correction is through buying puts.

Buying puts on falling stocks comes with many advantages… especially over traditional short selling. But options trading comes with its own risks.

Consider another possibility…

You can also use exchange-traded funds, or ETFs, to make tactical bets against the market in the event of a crash, while taking on less risk.

Here’s what I mean…

ETFs track the performance of a particular basket of securities – stocks, bonds and other asset classes – so, in effect, they are instantly diversified.

They can include almost any asset class you can think of. It’s what makes ETFs a powerful instrument for trading the market.

Incidentally, ETFs also empower investors to execute unique trades that common stock investors cannot do.

But there’s a more important benefit that ETFs hand investors.

In the event of a market downturn, you can still generate a handsome return.

“Some ETFs give you the option to bet against the market – and make money when the market goes down,” says the Club’s ETF Strategist Nicholas Vardy.

“Say you are skeptical of the year-end Santa Claus rally and fully expect the U.S. stock market to fall off a cliff in 2019. The ProShares Short Dow30 (NYSE: DOG) allows you to profit from just this kind of doomsday scenario.”

For example, the Dow has dropped 9% from its October all-time high…

However, the ProShares Short Dow30 ETF gained 9% during the same time.

In other words, as the market began to fall, investors had a simple method to bank profits on the downward momentum of this correction.

But you could have gone a step further…

ETFs not only let you bet against – and profit from – down markets but can also use leverage to boost those gains even more.

For example, a more aggressive play against the Dow would’ve been the ProShares UltraShort Dow30 ETF (NYSE: DXD).

This ETF tracks twice the inverse daily performance of the Dow. In other words, whatever the market posts for the day, this ETF multiplies that performance by -2.

As the Dow lost about 9% of its value since its high in October, this inverse ETF play could have generated a gain of nearly 18%.

Here’s the bottom line… You don’t have to become a victim of your circumstances, be they in the market or otherwise.

Rather than acting out of fear, act strategically and use a unique investment like ETFs to profit in today’s perilous market.

You have no excuse not to.

Good investing,

Anthony