As you may know, I don't see crypto as the only investment tool. To be more specific, cryptocurrency accounts for just a little over 40% of my portfolio.
Today I will talk about another way to diversify your investments. I want to talk about tools such as iverse ETFs, or ETFs that grow when indices fall, and whether it worth buying them right now or not.
They are not so simple.
Buying inverse ETFs, stock market volatility indices and other attempts to capitalize on the market crash is a big risk that you must be aware of.
The global market trend remains upward. Therefore, instruments such as VXX or inverse leveraged ETFs should not be bought long term. This is a game against the trend, on the one hand, and against the function of time on the other hand.
Moreover, when the market falls, we cannot guess at what particular moment it will bottom out. Catching the bottom is extremely thankless. Moreover, there is more liquidity in the financial market today, and if the market falls, prices may push up earlier than we think.
Of course, investors have more and more well-founded doubts.
Is this a reason to buy inverse ETFs? I don’t think so. Have them for a very small amount as insurance? Theoretically, it is possible.
What's the output? In the fight against the trend, most will only lose money. However, if you are afraid of market corrections, it will not be superfluous to increase the share of stable securities - bonds or shares of reliable companies with maturities of up to 3 years or their own shares.
As the saying goes, desperate times call for a more conservative approach to investment.
But ... I think it's too early to rush out of the market.