5 ETFs To Buy If You Believe In A Bear Market (GLD, UUP, DMM, TIP, IBB)

With the market treading water for the past week or two, and some negative economic news being released many are wondering if this is a start of at least a short term market downturn. The following 5 ETFs should help insulate your portfolio from market weakness without exposure to highly leveraged and poorly constructed 2x or 3x short ETFs.

SPDR Gold Shares (NYSE: GLD) This ETF invests directly in gold bullion and provides a "safe haven" when investors become nervous. Also with interest rates very low, the investor is not giving up much interest income.

PowerShares US Dollar Bullish (NYSE: UUP) UUP is pegged to move in lock step with the US Dollar vs. a basket of other currencies. Lately when investors have become nervous they have fled to the dollar, which would give this ETF a boost. Also since 2008 the dollar and the overall market have moved in opposite directions.

MacroShares Housing Down (NYSE: DMM) DMM tracks the inverse change to the S&P/Case Schiller Housing Index. When investors perceive housing prices as going down this will tend to go up. Although this is a 3x levered ETF, the construction of this particular security is far superior to other levered ETFs.

Ishares TIP Bond (NYSE: TIP) This ETF tracks the performance of inflation protected bonds. If investors flock to treasuries out of concern or if inflation takes hold TIP should perform well.

Ishares Biotech (NYSE: IBB) IBB tracks the Biotech index, which has less correlation with economic cycles and earnings than most sectors. Because performance depends mostly on discoveries and breakthroughs it is somewhat insulated from market downturns. During the past 2 years IBB has lost just 3%, while the S&P 500 is down 32%.

With these ETFs in your portfolio you'll be able to run with the bear without getting killed by poorly constructed and highly leveraged ETFs.