SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

Good Online Business Ideas Start With Education

When the economy is bad, more and more people look for ways to supplement their incomes with good online business ideas. Does this sound like you? Are you looking for ways to make money online to help augment your income in these difficult times? Whether you have lost your job, or your employer has cut back on your hours, or the overtime you relied on has been slashed, you are in the same boat as millions of others.Today we have the Internet, and this is where most people will turn looking for help. They will begin looking for good online business ideas. Why not? After all, most of us have heard of people making money online. So why not us as well?The basic problem for most people is that when they start looking for good online business ideas, they have just about zero real knowledge to help guide them. We all see advertisements online with supposedly ”successful” folks telling us that they are making thousands of dollars per month in just a few hours a week. But are they scams? The fact is, if you spend some time working online you’ll come to realize something very simple: most of them are! How do you know if what you are looking at is a good online business idea or a scam? Without at least some knowledge up front, it can be very difficult to tell… until it’s too late and your bank account has suffered for your lack of knowledge.Before you start looking for good online business ideas, give yourself permission to get a little education first. The biggest mistake most people make is they dive right in, head first and willy-nilly, and never check to make sure there is any water in the pool! Why is it that people realize that if they want to open a “brick and mortar” business they need a certain amount of preparation and education before they begin, but they think that business on the Internet is somehow different? It’s not!Even if you’ve spent a lot of time online, or you’ve run your own business offline, you need to know how business online works. The Internet is very complex and a good online business idea alone will not be enough. Would you open a store on a busy street without checking out the location or products you are going to sell first? No of course you wouldn’t. You’d do your market research, and you’d also spend the time to find those allies and partners you’d need to help you in areas that are not your forte!You need to make the same kind of preparation if you’re seriously going to create any income online.Do you want to make money blogging? Do you want to be an affiliate marketer and promote one time sales to your mailing list? Do you want to promote a network marketing company online? Do you know all about how to do what it is you want to do online? If not… you need to learn how!Business online is the same as business anywhere else: it can be a nightmare, especially if you stumble into it blindly with no education. It can end up being very costly and time consuming as well, when really, it needn’t be either of those.The first requirement of any good online business is education. Take the time to learn all you can. Find some mentors… people who have “been there and done that”. Listen to their recommendation about which educational and business programs out there are garbage, and which are actually good online business ideas.You’ll be glad you did.

Online Travel Agent – What Does That Mean?

Once upon a time, in a place not far away, but in an era long since forgotten, there was a magical thing called a full service gas station. Do you remember? People would actually come out and pump your gas for you! It may sound like just a fairy tale, but it’s true, it really did happen!Now days, our travel agents are going the way of the full service gas station. People just don’t have time anymore, time to go in and meet with a travel agent, time to go over options, basically – they don’t have time for full service. Online travel agents are all around us now, on the internet. They are convenient, but not quite the full service “station” we are used to when making our travel plans.What is an online travel agent? An online travel agent is more like an online booking resource. It is any website that you can go to make travel arrangements. I am sure most of you have visited a site like this. You can log in, do multiple searches for flights, hotel rooms, car rentals etc. and place your order online – very convenient!Online travel agent bookings sites are helpful in many ways; people can explore all of their different options for travel right in one spot. If you are looking for a flight to Europe, for example, and your route is flexible, users can map out different itineraries online. Then, the user can pick which works best for them and make a decision about what they want to do. Also, the user gets exposed to options that they may not have thought of before; therefore broadening their horizons of what type of travel arrangements are available to them.Another pro for using an online travel agent website is the wide variety of products that they offer. Not only can a customer browse airfare, car rental, and hotel options. Travel insurance, airport shuttles, and tour tickets are also available for purchase. This is very helpful to an online travel planner, as they can cover most of their travel planning needs in one visit to a website.After booking a confirmation on a travel website, the customer will receive an email with confirmations and contact information. The information that is provided to the customer usually includes information about any E-tickets, car rental policies (or where to go to look for the policies), and provides information on what to do if the travel plans change. All of this information right at the fingertips of the travel planning consumer.Many people wonder if booking these types of travel arrangements online is safe. Yes – it is. Websites spend a lot of time and productivity making sure that their payment systems, whether outsourced or not, are safe. It is important for their reputation to provide reliable payment systems and to maintain secure sights. Bad news travels fast, and if a website wasn’t taking care of their customers, it wouldn’t take long for the world to notice.Taking from personal experience I have never had a problem with booking with an online travel agent. I have been booking travel online for over ten years and I can’t say that I have had one problem! I have even found that after booking my super cheap airfare on a we site, after I received my reservation information via email, it was s easy to tweak my reservation details with the actual airline after the fact. I have never had a situation where I have paid for my booking online, and had it not be legitimate when I showed up for the reservation, either. Basically, booking online with an online travel agent website is an easy, affordable, and safe way to book your travel.Online travel agents may seem scary to some. With news about security breaches and privacy issues, I can’t blame people for being shy about booking travel plans online. I have to say though, give it a try! You are bound to have a great and educational travel planning experience. And who knows, it might even be fun!