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.

Types Of Online Businesses That May Interest You

There are various types of Internet businesses that an Internet business newbie or aspiring online entrepreneur could choose from. Generally, online or e-businesses are relatively cheaper to set up & easier to run than their offline counterparts, but they’re arguably more competitive. To succeed in the world of online business, an e-business newbie must be passionate about the business, must have a good knowledge of the business and must possess a good deal of communication & marketing skills. The early days of new Internet businesses are usually the toughest & most discouraging, and during these times, it’s only passion that keeps the newbie from throwing in the towel. Of course, it would be foolish to jump into what you know absolutely nothing about. Doing a lot of research & planning is, thus, absolutely crucial to the ultimate success of any online venture. Most importantly, if you cannot communicate adequately and promote your products or services, then don’t even bother starting an Internet business because the competition will just put you out of business.Types of online or e-businesses include the following:1. Corporate Websites – these are not actually e-businesses in the real sense of the word. They are, rather, online representations of established offline businesses. These established “physical” corporations use their websites to maintain an online presence through which they market their products or services to a much broader audience. They can also use this medium to transact business with clients who, otherwise, would have been impossible to reach out to, hence increasing their customer base.2. Informational Sites – this type of Internet business includes online encyclopedias, online news, e-magazines, blogs, forums, specialized websites, etc. These e-businesses monetize their sites by paid subscriptions, placement of contextual ads like Google AdSense, promotion of affiliate products, or even selling ad spaces on their sites directly to advertisers. Of all these, I believe blogs are probably the easiest and most inexpensive to set up and run, hence I advocate blogging for any Internet business newbie or aspiring online entrepreneur with little or no start-up capital.3. Web Services – this type of online business include email services, search engines, social networking sites, chat rooms, bulk SMS service, web hosting, graphic design, web design, Internet marketing, translation services, market research, online payment services, directories, online market place, software development, etc.4. Online Shops – just as the name implies, this type of Internet business entails displaying and selling of ones own products in a shop, except in this case both product display and transactions are carried out online. Delivery of the sold “physical” products, however, is done offline, well except for some digital products like software, e-books, music, videos, games, etc, that are downloadable directly to the buyers computer, PDA, phone, etc. Note that in this type of business, the shop owner must actually own the “physical” products on sale, not necessarily being the manufacturer, but has at least acquired the products and have them in stock ready for delivery to any buyer. Hence, it could also be an already established offline shop looking to expand its customer base online.5. Affiliate Shops – the difference between this type of online business and online shops as described above is that with affiliate shops, the shop owner doesn’t have to own or have in stock any of the “physical” products on sale. It is also not the responsibility of the affiliate shop owner to deliver any sold product to its end buyer. All the affiliate shop owner does is to market and sell products owned by other individuals or companies.6. Online Trading – this includes forex trading, stock trading, options, futures, precious stones, crude oil, real estate, e-minis, etc.Now, of all these various types of Internet businesses, some are easy to setup while others are less so, some are also easy to run while others, not so and some are relatively less expensive than others. For a new Internet business owner or aspiring online entrepreneur, I advocate blogging and/or affiliate marketing because they are relatively easier to set up and run, and also very inexpensive. For instance, you could start a money-making blog with NO CAPITAL at all, provided you have access to a computer linked to the Internet.Well all I can say at this point is good luck with your chosen type of Internet business.

Nutritional Supplements – A Growing Industry

The nutritional supplement industry has achieved phenomenal growth in the last two decades. In 1994, the DSHEA law was passed. This new framework for the regulation of dietary supplements is better suited for nutraceuticals because it facilitates increased product accessibility for Americans. Since then, the nutritional supplement industry has effectively grown due in a way mutually beneficial to manufacturers and consumers. This phenomenal growth is not only seen in the USA, but all around the world, particularly in Europe.What’s driving the nutritional supplement industry? Let’s take a look at why nutritional supplements are in such popular demand.Worldwide Shift in Focus from Symptom-Relief to Proactive HealthcareNutritional supplements are meeting the health concerns of today forcing a shift in focus. The focus is now on proactive healthcare rather than symptom relief. People want to stay healthy.More people want to take proactive measures for maintaining good health. Most people who take nutritional supplements believe that nutritional supplements will help them to achieve optimal health over longer periods of time.Lifestyle and Environment IssuesBusy lifestyles, a lack of good dietary habits, the strains of daily life and high pollution levels can cause stress to the body. In order to relieve the pressures of life, many people prefer nutritional assistance to improve their situation.Nutritional aids are formulated to help relieve anxiety, antioxidants to help stress at the cellular level, even sleep aids. This type of assistance is preferred since it carries less harmful side effects, is non-addictive, and gently works with the body’s natural functions.Educated PublicEighty percent of illnesses are nutrition-related. Consumer awareness is leading people to make nutritional supplementation their first choice. Nutritional assistance is available to support heart health, eye health, digestive health, and many other health concerns. It is also used in proactive health measures to help prevent some types of health conditions.All of these health benefits have been validated by scientific research which gives them more credibility. A wide amount of research is available to the public through the Internet – credible sources like PubMed and Medline and no doubt such research has given nutritional supplements a dynamic impetus.Inadequacies of Conventional TreatmentsSome conventional treatments have fallen short of consumer expectations. Users of have communicated their preference for less harmful methods of treatment, unless pharmaceuticals are absolutely deemed necessary.The Freedom to Control Your Own HealthcareConsumers are happy to exercise their own healthcare by means of nutritional supplementation. More people are taking responsibility for their own health as seen by the rise in the number of nutritional supplements now available in the market. Using education and their own discretion, consumers are able to administer their own self-care regimen.. There is almost 100% consumer satisfaction leading to a growing insatiable consumer demand for more nutritional supplements!Advancing Research and Variety of ProductsThe demand for more strategic nutritional supplements, targeted for specific demographics and health concerns are driving nutritional supplement manufacturers back to the laboratory for innovative products that can meet consumer demands. Research on nutrition and herbs keeps advancing giving rise to more products. There are now special products for adolescents, working women, men and children. Nutritional supplementation has become a specialized industry and products that cater to specific health needs, in the right packaging, can make the right impression amongst consumers. Products for anti-aging, skin health, cardiovascular health, antioxidants, hair care, continue to be remain popular.Wider Acceptance amongst the Medical ProfessionThere is a wider acceptance of nutritional supplementation amongst the medical profession. More doctors are recommending nutritional supplements to their patients and many of them have begun to endorse products they believe in. More products are developed in collaboration with condition specific experts and nutritional researchers and some are formulated by well-known doctors. Famous athletes and celebrities are endorsing nutritional products and this too has added to the salability and credibility of the nutritional product.The nutritional supplement industry will continue to grow as breakthroughs in research, new manufacturing technologies and innovative products increasingly meet the health needs of today’s consumers.