Short ETFs are risky, but you could see considerable gains if the markets goes in the opposite direction. I would say if you were to go short via an ETF, put no more than 2-3% of your entire portfolio in the positions. The best part of short ETFs, is that they can be bought and sold like normal stock and are not required to trade on margin like a traditional short positions.

The bad is that they erode in value unless the market moves down sharply and quickly. Holding on to a short ETF for 2 years while a market remains stagnant will only leave you with a reduction in your premium. Even with the risks, if you can predict the market turn correctly or catch it on the way down, short or inverse ETFs can be a good hedge against a down market and help protect some of your gains and combat inflation.

Conclusion

My conclusions are simple, as of witting this I would say cash is a safe haven only if you are going to spend that money on stuff. As a consumer you can’t go wrong with cash and we all know the old adage, cash is king. On the other hand, as an investor or long term saver, cash will only erode in value via inflation unless you protect yourself.

The instruments mentioned above are only a small fraction of investment available to protect yourself from inflation. There are more alternative such as company bonds, preferred stock, real estate, precious metals, etc. Do some research and find out which is bet for you for your best practice financial modelling and your investment strategies.