How To Invest Like A Politician

If you’re worried about the direction of the U.S. economy, you’re not alone. Many investors are becoming increasingly bearish, and for good reason. The negative news just keeps coming. Whether it’s the state of the housing market or Fed Chair Powell’s hawkish remarks about inflation and what needs to be done to combat it. But some investors are finding ways to use the somewhat predictable drop in the stock market to their advantage. Even some of our elected officials.

No, this isn’t about another instance of House Speaker Nancy Pelosi going on another stock shopping spree, although not far off…

This time, sitting U.S. Senator Thomas Carper is the one in the hot seat. The question of whether or not an elected official in such positions should be investing in the stock market or shorting the U.S. economy is beyond the scope of this newsletter. However, seeing as how Carper sits on the Senate Finance Committee, there is plenty of reason for constituents to be bothered by this.

Nonetheless, what we want to do in this article is show you — the everyday, Main Street investor — yet another way to trade like those who maybe have the inside track on things like this. So let’s take a look at what he spent $110,000 on.

Carper spent that money on an active ETF that focuses on shorting U.S.-listed stocks. Now, while your current frustration at reading this may be high, let’s quickly get some perspective on this move. For an elected official, much less one that sits on the Senate Finance Committee, let’s just say this is a bad look. Shorting the U.S. economy can seem shady, like you’re betting on the country to lose, but here’s where we introduce some of that perspective we referred to above.

Instead of looking at this like we are hoping for the economy to crumble, look at it as you taking stock (no pun intended) of the current condition of the economic landscape and acting accordingly.

In the last edition of this newsletter, we spoke about investing based on reality and what opportunities the market is currently giving us. This isn’t betting or hoping the economy falls out; hope is not an investment strategy, rather, we are just acting on what we know to be true. What is true? Well, the market is still very much in the midst of a bear market cycle and the economic outlook continues to be bleak.

By taking this information, we can now form an investment strategy based on the facts and take advantage of the opportunities it presents. Your next question is probably, “how?”

Well let’s take a brief look at the ETF the senator bought…

The Advisorshares Ranger Equity Bear ETF (HDGE) is the ETF that Senator Carper used to capitalize on the faltering state of the U.S. economy, and you can too.

If the market is dropping and companies like Alphabet (GOOGL), Amazon (AMZN), and Meta (META) have all fallen by more than 40% from their highs, and with more “pain” possibly on the way, why wouldn’t you want to make money on the downside? Chances are you’re invested in these companies, or companies like them and you’ve watched your portfolio value dwindle away.

Now is the time to take back your power over a falling market and find a creative way to profit off the state of things. You are not helpless to stop the bleeding of your portfolio — you simply need some perspective.

Today’s feature: Bear Market Investing

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