SUNGARD DATA SYSTEMS INC.

SDS

SDS is a 2x leveraged inverse ETF best suited for short-term tactical trades during anticipated negative S&P 500 catalysts, not for long-term holding. Current market catalysts include unresolved US-China tariffs, potential Fed rate cuts, and strong AI investment trends, all of which can drive volatility. Leveraged and inverse ETFs like SDS carry heightened risks, including compounding losses and volatility drag, making loss recoupment especially challenging.

The ProShares UltraShort S&P500 ETF offers -2x daily S&P 500 exposure, making it popular for short-term trading. Leveraged ETFs like SDS experience decay due to beta-slippage, especially in volatile markets. SDS has shown positive drift over multiple time frames, making it a relatively safer hedge compared to more leveraged ETFs like SPXU.

Consider raising cash, using defensive strategies like writing covered calls, and investing in value plays to hedge against a potential stock market meltdown in 2025. Utilizing inverse index ETFs, such as the ProShares UltraShort S&P500 product, can also help investors reduce net-long exposure. High cash yields and lower futures/swap costs have made index-shorting ETFs an effective hedging tool, outperforming expectations in recent years.

MoneyShow presents top investment ideas for 2025 from their contributors. This year's edition presents a broad mix of theme-based stock picks, momentum-driven high-flyers and beaten-up stocks with turnaround potential, along with some speculative plays and ETFs. Part 3 includes Altria Group, Heico, Intel, Palantir Technologies, ProShares UltraShort S&P 500 ETF, Rivian and Ambev SA, among others.

A drift dashboard with 22 leveraged ETFs. Leveraged silver ETFs had the worst decay in October. SDS drift has been positive for months and long-term average is close to zero, making it a good hedging instrument.

Shorting the S&P 500 is risky and often unsuccessful over time, but some use leveraged inverse ETFs like SDS for bearish bets. ProShares UltraShort S&P500 ETF tracks -2x daily performance of the S&P 500 through derivatives and swaps, rebalanced daily to maintain the desired leverage ratio. The SDS ETF provides a way to hedge against market declines without unlimited risk, but carries risks of volatility decay and unexpected losses over time.

Our Model Portfolio went to cash due to market sell signals, now allocating $50,000 to the inverse ProShares UltraShort S&P500 ETF. Our short-term thesis is that SPDR® S&P 500 ETF Trust will continue to decline due to Middle East tensions. The market is expected to bounce back after the Middle East crisis is resolved, but weakness is still expected in August due to seasonality.

Wall Street wavered this week on high inflation data which lowered chances of an imminent Fed rate cut. Plus, geopolitical tension in Middle East has weighed on stocks.

Jon Wolfenbarger aims to help individual investors generate double-digit profits and beat the market in both bull and bear markets.

ProShares UltraShort S&P500 was added to our 2024MP Model Portfolio as the market is turning down. Communications Sector SPDR (XLC) and Technology Sector (XLK) were deleted from our Model Portfolio. Market weakness is indicated by the dropping prices in mega caps, a weakening economy, and the Fed's decision to stop raising rates.