Inverse investing based on what "will" happen?

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dschroeder01's picture
dschroeder01
Status: Member (Offline)
Joined: Nov 16 2010
Posts: 22
Inverse investing based on what "will" happen?

I'm a novice investor and have been reading here for less than a year.  I've gleaned some great info, but recently I've been wondering why there's not more talk of inverse investing in some of the options available that go up with negative performance elsewhere.  Nothing is certain, but it truly seems like we're headed for a fall in the short term and long term.  Instead of keeping one's powder dry, why not add more powder waiting for the "best" time to go all in with your cash?  Why no inverse investing during the coming rout, make some gains, then buy more PMs when we start the printing presses up again?  Just curious?

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
why indeed...

Because it's unethical?

sundarb's picture
sundarb
Status: Bronze Member (Offline)
Joined: Jan 10 2011
Posts: 72
hedging a bad idea huh?
Damnthematrix wrote:

Because it's unethical?

Rigged markets are unethical. Why would inverse investing be unethical? It is just a hedging strategy. For example, Jim Rogers hedges his commodity bullish positions with shorting NASDAQ and shorting emerging markets.

You can hedge gold and silver trading positions with inverse ETF's or options.

dschroeder01's picture
dschroeder01
Status: Member (Offline)
Joined: Nov 16 2010
Posts: 22
sundarb wrote: Damnthematrix
sundarb wrote:
Damnthematrix wrote:

Because it's unethical?

Rigged markets are unethical. Why would inverse investing be unethical? It is just a hedging strategy. For example, Jim Rogers hedges his commodity bullish positions with shorting NASDAQ and shorting emerging markets.

You can hedge gold and silver trading positions with inverse ETF's or options.

I am having trouble figuring out how this is unethical as well.  Lots of gold bugs here right?  Gold tends to go up in times like these (economic uncertainty), so does buying gold because I think the markets and paper money are going to tank make me unethical?  In a sense a gold purchase is a bet against the status quo right?

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