I Hope the Economy Tanks Because I Just Bought a 3x Leveraged Inverse ETF

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Over the last week I’ve changed up my investment portfolio allocation significantly. I’m bearish on the US economy and bought large stakes in inverse ETFs in both my regular and 401k portfolio. I bought some ProShares Short QQQ (PSQ) and ProShares Short S&P 500 (SH). They take rise when the Nasdaq Composite and S&P 500 indices fall.

This morning, in my most aggressive move, I bought a big chunk of ProShares UltraPro Short MidCap400 (SMDD). This is a 3x leveraged ETF. Yeah…

I made these decisions to hedge my long positions. Because of how my portfolio is allocated, I find myself hoping the tech sector does well, and that the Friday BLS job numbers come out terrible. ADP’s report states jobs increased above expectations for July.

Hearing what I did, my good friend told me to read this article about the perils of DIY investing:

What’s the connection here—why do some people with very high levels of analytical intellect become do-it-yourself investors? Having high analytical intellect does not necessarily guarantee a high level of practical intelligence, and part of practical intelligence relates to one’s ability to make accurate judgments about people. In this regard, I suspect that Dr. Heart’s practical intelligence is not very high, and he’s not alone. He and his group greatly enhanced and nurtured their analytical skills in college and medical school but neglected another component of intelligence. Physicians are the least likely of all high-income occupational groups to report that as part of their overall educational experience they learned how to make accurate judgments about people.

Too bad I can’t follow the advice it gives:

  • Never be too proud to seek advice from skilled investment advisers, especially CPAs and tax attorneys.
  • Be more sensitive to the long-term benefits of having high-grade CPAs and attorneys as your advisers than to the short-term benefits of doing it yourself.
  • If you’re not good at judging talent, hire advisers who are.

My portfolio’s not big enough to get anybody’s attention as a client. I’m also not deluding myself in thinking what I’d doing is investing. I’m straight up gambling. Fingers and toes crossed.