Ideally, all of the decisions we make in life involve consideration of both the pros and the cons of the possible outcomes. For example, the decision to eat a piece of chicken past its expiration date should be based not just on the potential for a tasty dinner, but also the potential for a less-than-pleasant gastro-intestinal reaction.In other words, most things in life have both upsides and downsides, and our actions should be – though aren’t always – predicated on whether the upsides outweigh the downsides. While many bad decisions can occur as a result of a failure to consider the downsides, just as many poor choices are the result of the failure to understand the downsides, rather than not considering them at all.Most people know that irresponsible financial behaviors can give you a bad credit score, for instance, but many folks tend to underestimate the many downsides of having bad credit. To help put things in perspective for your next financial decision, here are three of the biggest downsides to having bad credit.1. You Have a High Chance of Being Rejected for New Credit
At its heart, having bad credit is basically like walking around wearing a sign that says, “I can’t handle debt.” At least, that’s how most creditors are going to interpret your poor credit history and low credit score when you come asking for a line of credit.That’s because lenders use your credit reports and scores as a means of determining your credit risk, or how likely you are to repay what you borrow. So, if you have a history of missing payments or defaulting on debt, lenders aren’t going to want to give you more money, and they will reject your application for new credit.Think of it this way: If you loan your neighbor your lawnmower in June but they never return it, how likely are you to lend them your snowblower in December?Since most major banks have a fairly low risk tolerance, bad-credit consumers are left with limited options for finding a credit card or loan. Namely, you’ll be looking at lists of subprime lenders who specialize in bad-credit, high-risk applicants – lenders who aren’t exactly known for their affordability or top-tier rewards. Which leads us to the next big downside to bad credit: the expense.2. Creditors, Landlords, and Utility Companies Will Charge You More
It took a few tries, but you finally found a subprime lender that will work with you. Great, hard part over, right? Wrong. Lest you think that qualifying for new credit is the only big downside to having bad credit, just take a look at how much that credit is going to cost you.As we mentioned, your credit score is what lenders use to determine your credit risk. High-risk applicants are the most likely to default on their debt (not pay it), so lenders willing to work with bad-credit consumers have to find some way to balance the risk. They do this by jacking up interest rates and adding on extra fees.As an example, consider a $10,000 car loan repaid over three years. Applicant A, who has a great credit score of 750, will likely be offered an APR of around 3.5%, which means Applicant A will pay around $550 in interest over the three years.At the same time, Applicant B, who has a low credit score of 580, had to use a subprime lender to get the same size auto loan. The subprime lender charged Applicant B an APR of 10%, which means Applicant B will pay over $1,600 in interest over three years.What’s worse, it’s not just lenders and credit card issuers that will charge you more for having bad credit. You’ll likely face a credit check when applying for a new apartment or when you set up utilities in a new location, and having bad credit can result in being charged a larger security deposit than you would otherwise need to provide.3. You May Miss Out on Valuable Financial Opportunities
An important part of finance and accounting, opportunity cost is basically the consideration of what you’re missing out on when you make a decision to do something else. For example, if you choose to spend your last $5 on a fancy coffee, the opportunity cost could be that $5 hamburger you don’t get to eat later.When it comes to your credit, having bad credit is rife with opportunity cost. Take credit cards, for instance. With bad credit, you’re stuck using subprime or secured credit cards that likely cost a lot without offering very much. In contrast, if you had good credit, you could potentially earn hundreds of dollars worth of credit card rewards and perks every year simply by using the right credit card.And it goes beyond credit cards. Drivers with good credit can get dealer incentives when shopping for a new car, and you can even earn insurance discounts for having a healthy credit profile.Don’t forget the extra cash you’ll likely be required to provide when renting a new apartment. Say you’re required to make a $1,000 security deposit when you move in because of your bad credit. That money could easily be earning you dividends in your retirement account if it weren’t being wasted in your landlord’s bank account.Don’t Let Bad Credit Hold You Back
Although it’s our own decisions that often lead us to bad credit, few of us actively choose to tank our credit scores. You can wind up with bad credit as a result of a series of seemingly minor decisions that are made without full consideration of the consequences. Hopefully, however, knowing these three major downsides of bad credit helps give you perspective when making your next financial decision, be it large or small.For consumers already struggling with bad credit, these downsides are likely daily considerations. But they don’t have to be lifelong obstacles. You can rebuild bad credit over time by practicing responsible credit habits. You can also use credit repair to remove any errors or unsubstantiated accounts dragging down your score.The most important rule for building credit is to always, always, always pay your bills on time. Your payment history is worth up to 35% of your credit score, and delinquent payments can cause you to lose dozens of points with a single mistake. You’ll also want to ensure you maintain low credit card balances and only borrow what you can afford to repay as agreed.With time and diligence, even the worst credit can be rebuilt, freeing you from the many downsides of having bad credit. Even better, having great credit has plentiful upsides that will make the hard work well worth the effort.

START-UPS TAP A BIG POTENTIALIF BUSINESS is your first love, the coming time is yours to woo. The hesitant flirting the Indian entrepreneur started with February 14, St. Valentine’s Day, a few years ago has now turned into a fullfledged affair. Varied trades spruce up their offers in the run-up to the Festival of Love, which industry experts say has become the second-biggest business opportunity in the calendar, even surpassing Diwali and New Year. Businesses, so it seems, aren’t falling behind the changing festival mix of Indian youth.For K Vaitheeswaran, who co-founded online retailer Indiaplaza, business around valentine’s Day has been growing by leaps since 2006. “Direct spending on Valentine’s day is nearly 30-40% more than Diwali, making it a rich opportunity for retail entrepreneurs to boost their topline,” he says. From gifts, candies to expensive gadgets, Indiaplaza helps lovers exchange articles through the internet, across boundaries and even away from their parents’ eyes. The first time Indiaplaza tried to cash in on Valentine’s Day was in 2002, but it was a washout then, with not much ‘awareness’ about the day.In 2003, there were protests and agitations over Valentine’s Day celebrations across the country, Mr Vaitheeswaran recalls. But the tough beginning was soon followed by a surge in the day’s appeal and business started to boom. “(The protests) created more excitement about the day’s importance. And because the protests were offline, people switched to the ecommerce website to send their gifts across. Thereafter, the sales started showing a rising trend on this festive day,” he says.According to US National Retail Federation, US consumers alone spent nearly $13.7 billion last year on Valentine’s Day shopping. This was a 22% rise from the past five years. As for the domestic market, an independent study on the consumer markets in India, presented at the 2007 International Marketing Conference, suggests that the Western fancy has started to take roots in Indian markets as well. The study noted that Valentine’s Day sales in 2007 were about 15% higher than that during Diwali at these retail outlets and this is expected to increase by 20-25% in 2008.Only the Christmas season rings in bigger revenues. And it seems entrepreneurs in the country clearly aim to boost the day into first place as more and more start-ups start to capitalise on the opportunity.Despite the pressure to buy gifts, most of the money spent on V-Day this year would keep up the trend set in the previous years. Spending would go to tokens of affection – cards, candies, flowers and nightouts. Floricultural start-up Ferns ‘N’ Petals, for instance, is gearing up for the Cupid’s arrival in a manner unlike any other. Apart from selling flowers, Vikaas Gutgutia’s company is banking on service as a major differentiator for this year. The company has planned to offer midnight delivery service, in addition to selling cakes and chocolates with its flowers on Valentine’s Day. It is also offering its customer the choice of buying gold-plated flowers. Says Pawan Gadia, vice-president at Ferns ‘N’ Petals, who jump started the company’s much-touted franchisee model, “Product innovation for such days is the key to success. You always have to think what different can you do this year which would excite the customer. A mundane run-of-the-mill product line each year does not help when you are working in such a business environment.” F’N'P is hoping to increase its Valentine’s Day sales by 40% this year, adds Mr Gadia.What is a day of gifts without cards? According to Anil Moolchandani, founder & MD of Archies, Valentine’s Day sales account for nearly 12% of the company’s full-year sales, making it the single-biggest occasional sale period for his company. “The trick is to promote and market as much as you can when your business is linked to an occasional sale,” he says. “Essentially, occasional sales help you build a brand presence and to add to this with more and more companies joining the occasional bandwagon for this day, it is becoming easier for any start-up in this space to cash in on the Valentine’s Day sales,” he adds.Archies, founded in 1979, introduced its first Valentine’s Day card in 1984 and it took sustained marketing efforts till 2000 for this occasion to “become critical mass for the company,” recalls Mr Moolchandani. Somebody once wondered cheekily why Valentine’s Day comes exactly nine months before the Children’s Day on November 14? The guys who make it all happen, the matrimonial websites, are also tapping into the business potential of Valentine’s Day.Bharat Matrimony, one of India’s largest matrimony websites, sees the day as a raw material for its business. Says Murugavel Jankiraman, founder and CEO, “We are planning to ramp up the promotional activities around Valentine’s Day period considering that online activity for our website picks up around this period. Unlike other festival days, Valentine’s Day is connected directly to our core business, and it always helps to use such events, which directly relate to your core business as effective marketing tools.”Like Bharat Matrimony, luxury bags maker Baggit too plans to leverage on this opportunity, “More than anything else, it’s an occasion to gift and dress up and clearly a fashion brand would see synergies in that. In fact, we are timing our sale this year on February 12, very close to Valentine’s Day,” says Baggit founder Nina Lekhi. “In case you have a product targeted for the youth, Valentine’s Day would be the point to test response to a particular campaign, which you might want to roll out on a larger scale later,” she adds. In short, what has worked for these entrepreneurs is the packaging of their products. “On days like the Valentine’s Day, there may be little sale in terms of quantity for many business start-ups, but the trick is to fix yourself a niche area and make it high margin business for yourself, as events like Valentine’s Day do not tend to be mass market phenomenon,” says Mr Vaitheeswaran. “With Love’s Light Wings Did I O’erperch These Walls,” said Shakespeare’s Romeo to his sweetheart Juliet.For a start-up with aspirations to make a big mark on the competitive business stage, Valentine’s Day can give wings and plant a kiss of success on the entrepreneur’s cheeks of desire.

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.