Prepare to catch as the markets' levitation trick fails

Paul Amery explains how to bet against the market with an inverse exchange-traded fund (ETF) and tips one fund to buy now.

Investors who bet on falling prices get a bad rap. Bullish company executives, motivated by options-based pay, dislike those who query their firms' share prices. Regulators get twitchy whenever the phrase short selling' pops up. And no one likes a nay-sayer. Nonetheless, those betting on periodic declines have history and facts behind them.

Markets can overshoot to the upside as easily as they become undervalued. It's clear that one of the (unspoken) objectives of quantitative easing (QE) is to protect banks by inflating a whole range of asset prices, from government bonds, to shares, to residential and commercial property. If this levitation trick fails, watch out and be ready to benefit.

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Paul Amery

Paul is a multi-award-winning journalist, currently an editor at New Money Review. He has contributed an array of money titles such as MoneyWeek, Financial Times, Financial News, The Times, Investment and Thomson Reuters. Paul is certified in investment management by CFA UK and he can speak more than five languages including English, French, Russian and Ukrainian. On MoneyWeek, Paul writes about funds such as ETFs and the stock market.