That is a great question. Rather then shorting a stock, we would look at purchasing some reverse ETFs. These are funds that basically mimic the market (or parts of it) in reverse. So if the market is going down, these ETFs will go up. Some of these are designed to go up 2 or 3 times as fast as the market goes down. So if the market is down 1%, the ETF will be up 3%.
It is important to be careful with these ETFs, but once the market is in a confirmed downtrend, they can make a lot of money.
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