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.

Shoe Repairs And Several Other Things When I Was 7

Shoe Repairs And Several Other Things When I Was 7
My Dad repaired most of our shoes believe it or not, I can hardly believe it myself now. With 7 pairs of shoes always needing repairs I think he was quite clever to learn how to “Keep us in shoe Leather” to coin a phrase!

He bought several different sizes of cast iron cobbler’s “lasts”. Last, the old English “Laest” meaning footprint. Lasts were holding devices shaped like a human foot. I have no idea where he would have bought the shoe leather. Only that it was a beautiful creamy, shiny colour and the smell was lovely.

But I do remember our shoes turned upside down on and fitted into these lasts, my Dad cutting the leather around the shape of the shoe, and then hammering nails, into the leather shape. Sometimes we’d feel one or 2 of those nails poking through the insides of our shoes, but our dad always fixed it.

Hiking and Swimming Galas
Dad was a very outdoorsy type, unlike my mother, who was probably too busy indoors. She also enjoyed the peace and quiet when he took us off for the day!

Anyway, he often took us hiking in the mountains where we’d have a picnic of sandwiches and flasks of tea. And more often than not we went by steam train.

We loved poking our heads out of the window until our eyes hurt like mad from a blast of soot blowing back from the engine. But sore, bloodshot eyes never dampened our enthusiasm.

Dad was an avid swimmer and water polo player, and he used to take us to swimming galas, as they were called back then. He often took part in these galas. And again we always travelled by steam train.

Rowing Over To Ireland’s Eye
That’s what we did back then, we had to go by rowboat, the only way to get to Ireland’s eye, which is 15 minutes from mainland Howth. From there we could see Malahide, Lambay Island and Howth Head of course. These days you can take a Round Trip Cruise on a small cruise ship!

But we thoroughly enjoyed rowing and once there we couldn’t wait to climb the rocks, and have a swim. We picnicked and watched the friendly seals doing their thing and showing off.

Not to mention all kinds of birdlife including the Puffin.The Martello Tower was also interesting but a bit dangerous to attempt entering. I’m getting lost in the past as I write, and have to drag myself back to the present.

Fun Outings with The camera Club
Dad was also a very keen amateur photographer, and was a member of a camera Club. There were many Sunday photography outings and along with us came other kids of the members of the club.

And we always had great fun while the adults busied themselves taking photos of everything and anything, it seemed to us. Dad was so serious about his photography that he set up a dark room where he developed and printed his photographs.

All black and white at the time. He and his camera club entered many of their favourites in exhibitions throughout Europe. I’m quite proud to say that many cups and medals were won by Dad. They have been shared amongst all his grandchildren which I find quite special.

He liked taking portraits of us kids too, mostly when we were in a state of untidiness, usually during play. Dad always preferred the natural look of messy hair and clothes in the photos of his children.

Coupling Inbound Marketing With Your Online Reputation Management

Unlike how it was in the past, marketing has changed dramatically over the years. Although traditional marketing still exists and is very important to the overall process, inbound marketing is essential at this point and pairing it with your increased reputation is a natural choice.Having a fresh, novel approach to marketingWith traditional marketing, you have to go after your customers. You have to educate them about what they want and need and you have to convince them that you have what they cannot live without. That often involves a lot of interrupting and it often leaves the customer (or potential customer) feeling irritated and put upon. On the other hand, more modern marketing (inbound marketing) takes the opposite approach in many ways. First of all, with inbound marketing, you don’t go after your customers and potential customers. You get your customers to come to you. Because of that approach, those customers and potential customers are prescreened and prequalified. You don’t have any need to twist their arms. They come to you willingly and happily.Another positive feature of inbound marketing is that you will not have to eat up most of your budget to accomplish your goals. Inbound marketing costs very little. With traditional marketing, in all likelihood, you would have been forced to spend a great deal of money in order to accomplish what you set out to do. Because of that, if you owned a small or even medium-size company, you would have had a difficult time competing with larger companies from a marketing perspective. Of course, what follows that is your professional reputation. The more successful you are at causing a stir and getting people to know you and to eventually buy your offerings (after they have believed in your credibility, trustworthiness, and expertise), the better your professional reputation will become.Marketing to the appropriate peopleWhen it comes to your marketing efforts for your business, it is important to choose the most appropriate target audience possible. Your target audience must be interested in what you have to say and in what you can do for them. They must also want to be in the market to buy what you are selling and to feel that you are the best person from whom to buy that particular product and/or service. Additionally, the usual traditional (outbound) marketing approach may no longer work for you. Another thing to keep in mind is the fact that when it comes to outbound marketing efforts, the target audience has gotten very clever about thwarting your efforts. They can block your advertisements, they can put themselves on a “Do Not Call” list, etc. In other words, they have ways of avoiding you entirely.On the other hand, inbound marketing can be extremely effective and, if you do it correctly, your target audience members may not even be aware that you are trying to sell them anything at all (not even at some point in the future). When it comes to inbound marketing, the approach that the technique takes is concentrating on drawing people, converting prospects to eventual customers, closing the sale, and satisfying those customers on a long-term (or permanent) basis. Inbound marketing creates solid, enduring relationships that last for very long time and are mutually beneficial. Those relationships create a very positive feeling between the other people and you. Again, along with successfully marketing your brand, your reputation will also get a boost and it will become stronger and stronger. Inbound marketing will general more online traffic, it will create new leads, and it will allow you to ultimately increase your revenue.How do you ensure that your inbound marketing campaign is successful?The best way to ensure that your inbound marketing campaign is successful is by writing and posting top-notch content. You want to share content that is well written, innovative, insightful, and amazing to the point where other people feel compelled to share it with people they know and trust. If your content was done correctly, it will answer all of your target audience’s questions (even the ones that they haven’t asked yet). In fact, you want them to seek the answers automatically from you. If you can get them to that point, you will be good to go.Making loyal customers from target audience membersWhen it comes to the nature and approach of inbound marketing, it is important to understand that the relationship and interactions between human beings is at the heart of it. Your target audience members are critical to your professional success; however, on some level, it is even more critical that you create loyal customers who will stick with you for a very long time to come. If you can create brand champions, you won’t have anything to worry about.ConclusionUsing inbound marketing to help boost your professional reputation is a brilliant thing to do. Inbound marketing is a proven, successful, intelligent approach to marketing your brand. It is very easy to learn how to use it and it is extremely effective. You will start to see positive results within a relatively short amount of time. Outbound marketing is an approach that interrupts the target audience members to get your point across. It is a hard approach and, although it works well when paired with inbound marketing, it often doesn’t work so well by itself. On the other hand, inbound marketing has tremendous benefits for everyone involved (on both sides of the fence).