Long-Term Investing, Stock Market, Stocks, Trades and Ideas

Short ETFs vs. Shorting ETFs

This was brought up in the comments, and I’d like to discuss this topic separately. In my opinion, it makes sense to only short both long and short ETFs. The way they’re structured, both long and short ones have a high “leak” rate due to the daily rebalancing and expense fees. By always being on the short side, you win just a little bit more. So for example, if you want to…

  • long financials -> short SKF
  • short financials -> short UYG
  • long commercial RE -> short SRS
  • short RE -> short IYR, etc. etc.

Some visuals to back up my strategy…