When cyclical bear markets unfold, the two categories of stocks that suffer the most are :
- the leaders of the entire secular bull market because of their eleveated valuations and heavy portfolio concentration, in this case the FAANGS – Facebook, Apple, Amazon, Netflix and Google
- The small capitalisation stocks their liquidity is less deep and therefore portfolio liquidation happens with very little buying appetite on the way down
As can be seen form the chart below, once the market turns, the downside in the Russell 2000 index will be significant.
As all portfolios cannot short stocks, we have identified products that enable investors to play the short side in these two categories.
Here’s how to SHORT the US RUSSELL 2000 Index of US Small Capitalization stocks
Mini Future SHORT 2 X on the RUSSEL 2000
This product may go up or down and has a leverage factor of 2X embedded. We only present it as an illustration of how we implement our strategic conclusion that the US equity market is peaking and that the best way to make money forward is to short these instruments. It is not a solicitation to BUY or SELL these instruments.
Potential investors should take proper legal and financial advice before investing.