The U.S. economy has had a long bout of progression, and investors in exchange traded funds (ETFs) may be ready to put their money into a defensive strategy. Although a recession hasn’t hit, some are pondering "when" and want to protect their assets. David Schrader for Seeking Alpha has a few ETFs for portfolio protection, assuming the economy continues a decline:

  • Ultrashort S&P 500 ProShares (SDS): This ETF doesn’t short the economy, rather it bets on a decline of the stock prices of the companies that make up a large portion of it.
  • Healthcare stocks and ETFs: High quality, high-potential health care stocks are those companies that have a good balance between a current product base and a strong product impact potential.
  • Beware retail and consumer discretionary: The average American consumer may not be able to maintain strength between the blows of a depressed housing market and rising inflation. Remember that commodity prices are taking off from already elevated levels.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.