It’s only mid-March—and 2025 has already been a rollercoaster for investors.

Between rising tensions between the U.S. and its trade partners, unpredictable Fed policy, and a stock market that just can’t seem to find its footing, it’s easy to feel like your portfolio is walking a tightrope without a net.

In this kind of environment, it’s more important than ever to have a strategy for protecting your wealth when markets take a nosedive.

And one of the simplest, most effective ways to do that is with a tool that’s often overlooked: inverse ETFs.

What’s an inverse ETF?

Inverse ETFs are designed to move in the opposite direction of the benchmarks or funds they follow. So when the markets go down, these ETFs go up.

For example, the ProShares Short S&P 500 ETF (SH) is designed to mirror the daily moves of the S&P 500—when the S&P goes down, SH goes up by approximately the same amount (and vice versa)…

The ProShares Short Dow 30 ETF (DOG) is designed to go up when the Dow is down…

And the ProShares Short Russell 2000 (RWM) does the same for the Russell 2000 small-cap index.

If you’re feeling a little more aggressive—or want to hedge more dramatically—you could look at leveraged inverse ETFs.

These funds aim to deliver 2x or 3x the inverse daily return of their benchmark.

For example, the ProShares UltraShort S&P 500 (SDS) seeks 2x the inverse of the S&P 500… and the ProShares UltraPro Short S&P 500 (SPXU) aims for 3x the inverse.

These aren’t exotic or complicated investments. They trade just like stocks and are easy to buy through any brokerage account.

Just a heads up: Inverse ETFs reset daily, so their performance can drift from what you expect if you hold them too long in a choppy market. 

In a sense, you’re tracking a set of one-day performances of a chosen sector (or the market)—not its overall returns. 

That means the longer you hold them, the more their returns will vary from the market they’re tracking (thanks to volatility and the compounding process)… 

And the higher the leverage—like the 2x SDS and 3x SPXU—the greater the difference in the total result.

So make sure to monitor them regularly.

Why now?

The current market looks a lot like some of the more dangerous environments we’ve seen in recent history. Stocks are swinging wildly. Volatility is high. And the usual safe havens (like bonds) aren’t acting so safe anymore.

That’s why inverse ETFs deserve a spot on your radar. They give you a way to profit from market drops or at the very least, offset some of the pain in your portfolio.

They’re not a silver bullet—and definitely not something to go all in on—but when used smartly, they can be an investor’s best friend in tough times.

If you haven’t explored them yet, now might be the perfect time.

For more strategies for investing in today’s turbulent market, make sure to tune in each week to WSU Premium.