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One of the advantages of trading the financial markets is the ability to go short different stocks or sectors in times of economic uncertainty. Some stocks, sectors and even the broad market become unfavorable. An example of this is the financial services sector that has resulted in many companies experiencing losses that are exposed to the sub prime mortgage market. Even if you are a long term investor you may want to take adequate precautions to protect your portfolio. More sophisticated investors can use futures and options to create strategies that either go naked short or hedge existing holdings. For individuals who do not want to use excessive leverage, inverse ETFs are ideal. Ultrashort ETFs or bear market ETFs allow you to position for a
decline in the general market or a specific sector. You can position
one to one with the market or if you prefer to be more aggressive,
utilize double inverse ETFs. ETFs are purchased on the exchange
on which they are traded. Currently, the largest range of short
ETFs are offered on the US exchanges. You can use a discount or
full service broker to access these offerings. Long term investors
who want to protect a retirement or IRA account may want to seriously
consider the benefits of using an ETF such as the Proshares short
ETFs.
General Market (Bear Market Short ETFs) NASDAQ 100 : PSQ
NASDAQ 100: QID Proshares Short Sector ETFs: (More available here: Proshares Ultrashort ETFs)
Ultra Short International ETFs: Short MSCI Emerging Markets: EUM (MSCI Emerging Markets Index)
Inverse Gold Exchange Traded Notes DB Gold Double Short ETN: DZZ The advantage of ETFs is that you can take positions on an intraday
basis unlike mutual funds which are priced once a day. This gives
the trader the opportunity to trade on a very short term basis and
use the ETF as part of more complex strategies. 
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