Concerns surrounding the spread of COVID-19 omicron variant, high inflation, and the Fed's decision to speed up its tapering of asset purchases could precipitate a market crash in the near term. So, to hedge one’s portfolio against a potential correction, we think inverse ETFs ProShares Short S&P500 (SH), ProShares Short QQQ (PSQ), ProShares Short Russell2000 (RWM), and ProShares Short Dow30 (DOG) could be ideal bets now. Read on.The S&P 500 has declined some 4% since hitting its all-time high last month, just before researchers in South Africa identified a new COVID-19 strain. The spread of the omicron variant, high inflation, and the Fed's decision to increase the pace of its tapering are giving investors pause, with the notion of a major market downturn on the minds of many. In addition, Harry Dent Jr., an American financial newsletter writer, has predicted that the biggest market crash will hit next year, with the biggest depression, with the economy not rebounding until 2024.
The National Institute's Autumn 2021 Global Economic Outlook predicted that annual U.S. inflation would rise from 1.2% in the fourth quarter of last year to 5.1% this year and moderate to 2.3% in the fourth quarter of 2022. Furthermore, CEOs across the economy agree that market volatility will remain a primary challenge even next year.
Given the rising market uncertainties, we think one could add inverse ETFs ProShares Short S&P500 (SH), ProShares Short QQQ (PSQ), ProShares Short Russell2000 (RWM), and ProShares Short Dow30 (DOG) to one's portfolio. Inverse ETFs help hedge against market downturns by moving in the opposite direction.