Lou Mercer: So let's talk about that.
Kevin Horner: It's exceedingly risky. Beware.
Lou Mercer: If you believe the stock market is going down you can profit from it by selling stock today with the idea that you're going to buy it back for a lower price in the future. It's a great strategy as long as you're a disciplined trader who can take a loss when the market goes against you. So with Schwab and just about every other brokerage firm out there you will have things like bracket orders where one triggers another or cancels another where you can predefine your walk away point before you get in. And that might help you stay disciplined to that exit strategy.
Kevin Horner: Yeah. But I would only caution that again I think it's an emotional scenario to a large extent. If you feel as though you're bearish by nature you're going to have probably a measure of success greater by trading the bearish side than you would the other side and me as a bullish trader, I struggle with those bearish trades.
Lou Mercer: So what if the S&P takes out at September and August lows there? If it happens and you want to profit from that, yeah, you definitely have instruments out there from shorting stocks or you can by inverse ETFs. But once again have a strategy. Stay defined to your exit point and don’t' get stuck in that losing position.
Randy Fredrick: Yeah. It's an interesting topic but what's fascinating is some of the most recent statistics I've seen indicate that only about ten percent of retail investors are ever willing to trade the down side. So they're actually – and I hope this isn't what the question is but what I think a lot of times when people ask that question they're not asking how can I implement short strategies. They're asking how can I trade the long side of the market during the down, during a down market. That's a dangerous game because most people really aren't willing to trade the down side of the market at all, meaning strategies that are intentionally designed as you were just talking about to make money in a down market. Most people just simply won't –
Lou Mercer: And if you look at something like Investor Business Daily they say "Hey. Let's own stocks when the market is going up. When it does down, let's get out of them." I would rather prefer that core and explore view. My long-term boring stuff, my diversified stuff. Ok. I stay long. But yeah, if you don't want to go shorter try to gain from the market going down. Then on your trading portfolio you would just move into cash and wait for the market to move up again.