Stocks plunged this morning as short-term yield rates surged. Stocks that would suffer the worst in a recession, such as consumer discretionary and tech, led the losses ahead of the Federal Open Market Committee’s 2-day policy meeting, which kicks off tomorrow. The Fed is expected to announce a 50 basis point rate increase, though some economists are now calling for a 75 basis point rate hike this week after May’s hot CPI reading.
Tech stocks have had an especially tough year as recession fears rise along with inflation. The Nasdaq Composite is deep in bear market territory, down 30% from its November 2021 ATH and 27.5% lower so far in 2022.
Given the sluggish backdrop for high-priced tech stocks, bearish investors may want to go near-term short on the Nasdaq. Today we’ll highlight the method many of the pros on Wall Street use for doing just that. However, you don’t need to be a professional to employ this tactic.
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The ProShares Short QQQ (PSQ) fund offers inverse exposure to an index comprised of the 100 largest nonfinancial securities on the NASDAQ, making it a potentially attractive option for investors looking to bet against this sector of the U.S. economy.
It’s important to note that PSQ is designed to deliver inverse results over a single trading session, with exposure resetting every month. Investors considering this ETF should understand how that nuance impacts the risk/return profile and realize the potential for “return erosion” in volatile markets. PSQ should definitely not be found in a long-term, buy-and-hold portfolio but may be a helpful tool for more active investors looking to either hedge existing exposure or bet on a decline in the top nonfinancial NASDAQ securities.
ProShares Short QQQ (PSQ) Data Summary
- Net Assets 1.11B
- Expense Ratio 0.95%
- Average Daily Volume $60.72M
Where to invest $1,000 right now...
Before you consider buying PSQ, you'll want to see this.
Investing legend, Keith Kohl just revealed his #1 stock for 2022...
And it's not PSQ.
Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.
Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
Find that to be extraordinary?
But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.
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