However, it is extremely difficult to predict how the market will perform in the future, so if you plan to buy, you may want to look at hedging your investments. There are several ETFs that are designed to move in the opposite direction (inverse) of a particular index (see Pro Shares for a full listing http://www.proshares.com/funds). One example is UltraShort S&P500 ProShares (SDS), which moves at twice the inverse of the S&P 500 (double short), so if the S&P500 went down by 1% for the day, SDS would be up 2% for the day. If you think that now is a good time to buy stocks, but you are worried about the possibility of the market declining further, you could buy a mutual fund or an Exchange Traded Fund (ETF) that tracks the performance of the S&P500 (like SPY) and then hedge your position with SDS. For example to hedge your potential gains or losses by 50% you could buy 100 shares of SPY at $100, which will cost $10,000 and then hedge your position by also purchasing 25 shares of SDS at $100, which will cost $2,500. If the S&P500 went up by 10% your shares of SPY would be worth $110 each for a total of $11,000 (gain of $1,000), but your shares of SDS would be worth $80 (down two times the inverse of the S&P500 change 2*10%=20%) for a total of $2,000 (loss of $500). Your net gain would be $500 or a 5% gain instead of 10%. If the S&P500 dropped 10% then your shares of SPY would be worth $90 for a total of $9,000 (loss of $1,000) and your shares of SDS would be worth $120 for a total of $3,000 (gain of $500). Your net loss would be $500. This hedging strategy works to limit the fluctuations in the market. However, if you were to buy these shares without also owning the underlying index, you would be speculating and your potential gain or loss would magnify the market fluctuations and increase the chances of appearing on the SmartStocks.com stock market game Top 100 and Bottom 100 rankings.