Why Short Sector ETFs Aren't So Smart

This article is by Eric Oberg, who worked in fixed income, currencies and commodities for Goldman Sachs for 17 years before retiring as a managing director. To join a discussion about short ETFs, please visit our special forum on Stockpickr.com.

What would you say if you bought an index fund, only to find out that it lagged the benchmark by 30%? 80%? Over 100%? I am sure you'd be dismayed, disappointed and disgruntled.

What if you had perfect foresight and decided at the beginning of this year to go short U.S. real estate and short financials? What if I told you about an easy way to implement these trades, and to implement them with two or three times leverage? You'd expect to clean up, right? ...