These three ETFs are crucial investing tools in a down market and can save your portfolio.

While finding the next GOOG or RIMM in the markets is what most investors dream about, most people don’t bother looking for those trades that will pay off big time when everything comes crashing down. Sure, a troubled bank may be tempting to short ,(or just about anything that had a ticker symbol last year for that matter), but with all the risk involved in shorting and with limited reward, there has to be a better way. Enter the inverse ETF. These inverse funds deliver the opposite performance of the underlying basket of assets. In other words, you can short by going long an inverse ETF and target entire sectors or indexes with a single trade making it much easier to profit from a drop than picking individual stocks that might not be as affected, or worse, rise!

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These ETFs are tools that every investor should know about and should always be kept handy for when an opportunity presents itself. Not everybody needs to lose in a crash. I’ve made several mentions of these ETFs in previous articles. My personal favorites are Proshares UltraShort S&P500 ETF (SDS), Proshares UltraShort Real Estate ETF (SRS), Direxion Financial Bear 3x ETF (FAZ). These puppies are not only inversed, but they are also leveraged!

It can be very tricky to predict pullback, let alone a crash. Although the opportunity to profit is there, it also poses a significant risk and should not be taken lightly. Keep these ETFs in your back pocket for a rainy day and you will not be a selloff victim. Stay tuned for more trading ideas, tips and updates with RSS feeds and Twitter.

Sincerely,

The MarketSpace Team

MarketSpaceTrading.com