The bears have essentially been hibernating since February, and not even Brexit could really bring them back. Sylvia Jablonski, managing director at Direxion Investments, said investors believing it is time for them to emerge from their slumber and take the market lower should consider using inverse ETFs.
"Investors have numerous things to be concerned about, and plenty of factors cause uncertainty in the markets today," Jablonski said. "Inverse ETFs are accessible, liquid, cost-efficient vehicles and are a great option particularly for investors and advisers that do not trade options, or do not want the hassle of negotiating borrow, recalls or rerates in the stock loan market."
One of the simplest and most cost-efficient ways to hedge S&P 500 exposure is via the use of Direxion Daily S&P 500 Bear (SPDN) - Get Report , according to Jablonski. With a management fee of 45 basis points, it is a cost-efficient tool to short the S&P 500.
"With the S&P 500 back at all-time highs, volatility near all-time lows, the dollar is steady and the U.S. is the best market for return at the moment," Jablonski said. "What we are seeing is essentially an 8-year bull market. The question is, can that last forever?"
Jablonski's second, more tactical idea for making money when stocks turn down is the Direxion Daily Developed Markets Bear 3X ETF (DPK) - Get Report . That ETF seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the performance of the MSCI EAFE Index.
Drilling down even deeper, Jablonski said investors seeking to profit from the continued weakness and uncertainty in the energy market should consider owning the Direxion Daily Energy Bear 1X ETF (ERYY) .
"All the uncertainties that drove oil back up are coming off now," Jablonski said. "U.S. stockpiles are increasing and supplies at all-time highs. If investors believe that the energy sector will suffer in coming months, ERYY would be a good way to either hedge commodity exposure to some degree, or to simply participate in downside index performance."