How to Trade Growing Fear in the Market

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Look out below.

For one, markets could dive even more, with the virus still making its way around the world.  Two, investors are nervous, given that September is seasonally one of the weakest market months and a higher likelihood the Federal Reserve could trim back on easy money policies.

“We see a bumpy September-October as the final stages of a mid-cycle transition play out,” Morgan Stanley chief cross-asset strategist Andrew Sheets said, as quoted by CNBC. “The next two months carry an outsized risk to growth, policy and the legislative agenda.”

There are fears of inflation, instability, tapering fears, that pesky virus…

It’s all snowballing.

With fear making a comeback, investors may want to bet on volatility, using:

  • iPath S&P 500 VIX Short-Term Futures (VXX)
  • ProShares Ultra VIX Short-Term Futures (UVXY)
  • ProShares VIX Short-Term Futures (VIXY)

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