What is the best way to use index funds to profit from the market pullback that will occur when the dow goes over 14,000?
You can buy something like SH which shorts the S&P. You can also buy to open Puts on SPY (the S&P 500 index fund) at a point to which you believe it will fall. As SPY falls the value of the Put increases.Neither is for the faint of heart or the inexperienced, and you REALLY have to watch your costs, which (low cost) is one VERY important reason for owning index funds in the first place.I'd suggest trying it on paper but include cost. See how your do. You read about the winners (a few), but the vast majority of losers are never heard from again.BobRYR Home Fool
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