Sunday, May 11, 2008


I spent some time this weekend looking into ETF's to hedge my long positions. My portfolio is currently about 90% long and 10% cash. In retrospect when the market hit 14,000 a while back I should have begun searching for something to hedge my long positions. The bear market short ETF's have been doing great this year (SSG is up nearly 35% YTD).

I always thought of ETF's were a great way to invest in foreign stocks without having to due extensive research, but domestic ETF's always seemed like an expensive mutual fund that you could trade like a stock. If you are not very familiar with ETF's Yahoo! has nailed it.

A short fund ETF is a great way to get some short exposure without the risk of actually shorting a particular stock. I like the idea of hedging my long positions with some short exposure, but I don't like the risk of a short squeeze. Here are a few of the top performing short ETF's and here is a blog that covers ETF's.