On The Upside
The economy may be heading downhill, but for short funds, things are looking up.
When life hands you lemons, make lemonade, right? The same goes for the gloomy stock market. One strategy of late for pessimistic investors has been betting on downward movements and buying so-called short, or bear, funds, which are designed to go in the opposite direction of a particular index or an actively managed fund. In practice, when the market slips, bear funds should make money. "It's great for investors who think the market is overvalued or is going down to actually profit from that," says Ryan Harder, a senior portfolio manager at investment management firm Rydex Investments.
Investment dollars have been pouring into this asset class over the past few years. Since 2005, holdings in bear funds have jumped from $6 billion to $16 billion, according to fund data provider Lipper. "Because of the negative fundamental data of oil, employment, slow growth and increased inflation, there are many more [investors] trying to benefit from the volatility," says Kevin Meehan, president of Summit Wealth Advisors.
Continue reading this article - and everything on Entrepreneur!
We make some of our best content available to Entrepreneur subscribers only. Become a subscriber for just $5 to get an ad-free experience, exclusive access to premium content like this, and unlock special discounts.
Entrepreneur Editors' Picks
-
Crypto Doesn't Have to Be Serious. Just Ask This Comedian Who Organized a Conference About Failure in the Industry.
-
Want to Succeed? Turn Your Fixed Mindset Into a Growth Mindset.
-
Google's CEO Is Asking Employees 3 Simple Questions to Boost Productivity
-
'Greatest Storyteller Wins.' Katy Perry on the Surprising Link Between Pop Stardom and Entrepreneurship.
-
How to Unleash Your Creativity and Transform Your Marketing Strategy
-
The 5 Personalities You Meet in a Coworking Space
-
'Man's Best Friend' — and Investment: The Thriving Industry of Pet-Related Franchising