There can be hell in the markets from time to time. The March-April period of 2025 was like that for American stock markets. At least until the last two weeks of April, I would say. Trump's tariffs really scared the markets. The S&P 500 pulled back by 18% at one point. The Nasdaq briefly went into a bear market, above 20%, and came back. But many people have been hurt. More importantly, it scares investors. What will I do if I buy a stock and get caught in the wrong position, if I lose a lot of money? Or it makes investors sell their stocks early.For example, we have compensated for most of this pullback and those who sold at the bottom are in great loss. Today, I will try to tell you some methods on how you can protect yourself against such pullbacks. More precisely, I will tell you about some funds, ETFs .

In general, protecting yourself against stock market crashes is called hedge . In other words, protection. Hedging has many different methods and methods. Today we will focus on one of the most practical ones, ETFs . But which ETFs ? Hell ETFs , hell funds. In other words, funds that will protect you if the world falls apart and the stock markets turn into hell. What I will tell you is of course not investment advice. I am doing this for educational purposes, but I think you will be very interested. How do you protect yourself from hell? Is there a way to profit from stock market pullbacks? What are the correctly designed ETFs and funds for all of these? More importantly, I will examine all of them, how to use them correctly.

One of the reasons I like the US stock market so much is that the financial markets are very developed and offer us very interesting products. ETFs that rise when the markets fall are a great example of this. ETFs and funds are actually very similar structures. We can also buy and sell ETFs on stock exchanges. They have such an advantage, and the ETFs we will talk about today protect you against risks when stock exchanges are going bad. Maybe even make money if you time it right.

It is very important to protect yourself against market declines. Because it is not easy to recover from big losses and the S&P500 , Nasdaq can also crash very hard. For example, in 2008, the S&P500 fell by 57%. In 2020, it fell by 34%. The S&P500 retreated 19% in 2022. The Nasdaq retreated 33% in the same period, and in 2025, the period we are living in, the retreat in the S&P500 went all the way to 17% at its lowest. It is important to protect yourself against these and ETFs, which I will talk about later, are important tools in this area. There are many different methods to protect yourself against a collapse. Today I will talk about two basic types of ETFs.

The first type is called Tail Risk ETFs . These are crash ETFs , hell ETFs , when the world goes crazy ETFs . Then there are inverse ETFs . These are called Inverse ETFs. We will focus on SQQQ . SQQQ Nasdaq He's wearing shorts . So if Nasdaq falls, SQQQ rises. Moreover, it rises 3 times. In other words, it can rise 9% against a 3% fall in Nasdaq . Of course, the opposite is also true. I'll talk about that a little later.

Tail -Risk ETFs is to insure your portfolio . Deep OTM put options are used here. What does that mean? When you look at these ETFs , there are many options inside them. They have collected options that play on the decline of different assets. Their risks can be called low-medium risk. In other words, when the markets go up, their prices fall but not too much. Therefore, it is possible to hold on to this for a longer period. I will focus on the examples.

Inverse ETFs , such as SQQQ, are designed to profit from short-term declines. So this doesn't really insure you. It rather allows you to make money from a possible decline. These can be at different leverages. SQQQ is a leveraged ETF of 3. That is, for every 1 point decrease, SQQ increases 3 points. Conversely, if the Nasdaq increases 1 point, SQQ decreases 3 points. You have to look at it that way. This is also high risk and can lose value over time. In other words, even if the stock markets remain at the same level, they also lose value.Because of the unique problem of options, and you have to keep them short-term. For example, if you had bought these on the day Trump was going to make a speech about tariffs, or if you had said let's keep these aside until we get through these tariffs, you could have compensated for a significant portion of the damage in those tariffs. Because the decline in Nasdaq was 11% in the 2 days after the tariffs were announced. You could have made 33% of your money here. But if you had kept it, you would have given most of that profit back.

Of course, you shouldn't be limited to the examples I've given. If you do your own research, you can find other similar ETFs . I think there are 4 ETFs in this context that every investor should know. One of them is called Cambria Tail Risk, abbreviation TAIL. One of them is CAOS, its name is great. Alpha Architect's This is the Tail Risk ETF . SQQQ, I mentioned earlier, is an ETF that shorts the Nasdaq with 3 leverage , or bets on the Nasdaq's decline.

There is also TLT. TLT is not exactly like these. TLT invests in 20-year US Treasury bonds. It usually provides good protection if the stock market crashes. It's not as aggressive as others, but we'll see what the numbers are. It can provide protection. Because investors generally turn to treasury bonds when stock markets fall sharply. In this case, TLT increases. Because TLT holds treasury bonds. Although, the markets fell the week after Trump announced the tariffs and TLT also fell. But those are very exceptional periods. Normally, if stocks are falling, TLT rises.

Let's look at the performances. In the 2008 crisis, S&P 500 retreated 57% from the top. At that time, there was no TAIL and CAOS and SQQQ. TLT gained 33%. In other words, it provided a nice balance to the portfolios. In the 2020 crisis, the S&P 500 fell 34%. At that time, TAIL was already there, it provided a return of 11.9% . But this return period is a certain period. So when the stock market starts to recover, of course, don't forget that TAIL starts to lose money. While that decline continued, we are talking about the money earned until the bottom of this 34% decline. It earned 11.9% . CAOS did not yet exist at that time. SQQQ, on the other hand, returned 120%. In other words, it had a return of roughly 3 times that amount during that period. TLT's return was 21%.

In the 2022 crisis, the S&P 500 fell by 19%. This is the decline that started after the Fed increased interest rates. TAIL brought 6% in that period. CAOS brought in 8%. SQQQ brought in 65%. TLT brought in 7.3% . In the 2025 crisis, that is, the fresh crisis, S&P 500 fell by 17%. During that period, TAIL brought in 8.6% , CAOS brought in 10.1% . SQQQ brought in 49.2% , and TLT brought in 5.4% . Now, you may look at it this way and say, "I should buy SQQQ then." But that's not exactly the case. Because when the maturity is extended, SQQQ's performance is actually quite bad.

Let's run through some sample scenarios. For example, there was a flash crash in the Nasdaq . It's down 6% in 3 days, maybe. Nasdaq does this often. In this case SQQQ returns 18%. TAIL 5%, CAOS 6%, TLT 2%. So if you can time the drop exactly, SQQ Q is the best. But if you don't know when the decline will occur, TAIL, CAOS and TLT are calmer insurance products. We have entered a bear market. There are continuous declines. In this case, SQQQ initially rises rapidly but then starts to lose value. Due to the option structure in it. TAIL and CAOS do not rise rapidly suddenly but continue to rise slowly and regularly. TLT also continues to rise in general during this period as citizens flee to treasury bonds.

In bull markets, TAIL and CAOS start losing value around 2% to 6%. You can actually call this the insurance premium cost. Just like you insure your home and your car and pay for it even if there is no loss that year. The premiums of TAIL and CAOS are like that. SQQQ is falling very sharply. So if the bull market comes and it goes fast to Nasdaq , SQQQ will be very hurt. You should not hold it. In this case, if we want to create a strategy item, if you know the most suitable ETF SQQQ timing against sudden collapses. The one that comes right after that is TAIL. These provide quick drying and provide some protection.

In a bear market, TAIL, CAOS and TLT work better. TAIL at the beginning and TLT after CAOS are more reasonable. Here you are provided with a gradual protection. None of these ETFs are suitable in a bull market. It makes more sense to continue with stocks and make money from them, or to benefit from positive ETFs , that is, ETFs that make money when the stock market rises .

In horizontal markets, it is useful to buy TAIL and TLT as insurance and put them aside. Especially VIX, Volatility It would be wiser to buy them when the Index drops below 20. Because they are very cheap in those periods. They should stay on the sidelines, be defensive on the sidelines. You should not open too big a position. I will talk about position sizes a little later. I have important notes for investors here. So it is worth emphasizing again.

Tail -Risk ETFs work as long-term insurance, SQQQ is a tactical short-term money-making tool. Therefore, it is necessary to establish a balance between the two. You should never hold leveraged ETFs like SQQQ in your portfolio for a long time. If you ask how much money to allocate to this, you should make small allocations. Because the S&P 500 and Nasdaq tend to rise most of the time and we should never try to hedge our entire portfolio . Its cost would be very high. In this context, if we allocate around 3-5% of the total portfolio to such ETFs , we would provide ourselves with some protection. However, increasing the cash ratio in the portfolio is also a method to protect yourself, which is what I usually try to do. But it is useful to prepare our portfolio a little bit against bad days with diversifications like TAIL and TLT and never chase these types of ETFs after big collapses . For example, I am not sure if it is a great timing right now. Because we experienced the big collapse and the markets recovered a little after that.

Could there be a new collapse from here? It could happen. We don't know when. But still, it is generally not useful to buy ETFs after very big collapses. It is beneficial to wait a little while for the market to recover. If you buy after the market recovers, you will buy at more advantageous prices and prepare yourself for the new collapse. Roughly speaking, we need to think of this as insurance.

You are protecting yourself, but remember that these are expensive and costly. There is no need to protect our entire portfolio. Rather, it is smarter to follow the markets closely and play with our cash position. But having these in my portfolio helps me on bad days like this. I also use other hedging methods. There are many different hedging methods. For example, put options can be purchased. There are many different types of inverse or reverse ETFs . There are even inverse ETFs based on stocks . There are many different methods, but they are a bit more complicated and I would never recommend getting into the options market for an amateur investor. The ETFs that will protect you more easily are the ones I mentioned earlier, but of course you need to examine them all closely. With my advice, my suggestion, do not buy anything. Go and examine them closely.

So what has been the past performance of these ETFs ? Let's take a closer look. For example, this Cambria The Tail Risk ETF is a slightly newer ETF. When we look at its performance in the last year, it has shone very brightly in 2 periods. It rose tremendously during the fall on August 5th last year and this year it went crazy when Trump announced tariffs. It jumped from $12 to $14.5 in a single day. Again, it rose from $11.5 to $14 in another single day. If you have Cambria somewhere on a day like this, you'll be happy. But the long-term performance is also negative. Because if the stock market is going up, you're losing money on Cambria too. So it is not wise to keep them all the time. It may be more beneficial to keep them during periods when your particular concerns are more intense.

CAOS ETF has performed better in the last year and jumped on August 5th. It has had a good rise in the last period. But it is necessary to sell sharp rises like the one in August last year. Because then it pulls back again.Recently, there has been a sharp rise and then a pullback. But if the uncertainty in the stock markets is high, CAOS performs very well. According to TAIL , CAOS's long-term performance is also, It's also better than SQQQ . That's why I generally prefer to keep CAOS in my portfolio.

A look at SQQQ . That's the Nasdaq's 3 leveraged inverse ETF . The number of days that Trump announced tariffs increased from 32 to 55-56. In other words, there is almost a 100% return in a short period of time. But then suddenly there is a sharp decline. Remember, there was a postponement regarding customs tariffs. Then it fell sharply. So it is not wise to keep this type of hedge for too long. Sell it when you earn money, when you make a high profit. SQQQ can only make good money in a very short period of time. When you look at its 1-year performance, it generally shows a downward performance, but it has shone in 2 periods: on August 5 and during the Trump tariffs. SQQQ's long-term performance is pretty bad. Because stock markets generally go up. Nasdaq also generally goes up. An environment that SQQQ does not like.

What you need to do now is research other similar ETFs . How have they behaved in the past, during crises? How have they behaved in non-crisis periods? Make these types of comparisons to determine how much of these you should buy for your own portfolio and when you should buy them. Of course, the next part of the job is a bit of a craft. But I can say this clearly. Protecting your portfolio during bad times will make you feel very comfortable.

So is it wise to use these types of ETFs to make money? I don't recommend it. Because if you don't catch it right, especially SQQQ can perform very badly. The others are not that great either.

Maybe CAOS has a little more valuable collective performance. But when you have to hold them, you feel like things are going to get messy. I'm saying you have a fear of war. You're worried about a big economic announcement coming up. These are useful on days like this. I think it's always a good thing to insure your portfolio in general.