No, bear funds do not diversify your portfolio. Disciplined, long-term investors are long the markets because they expect a positive return on the capital they invest. Bear funds are neither investments nor opportunities for improving your diversification. They are simply bets. And like all bets, the odds of winning are slim. The markets have already priced in the available information and current uncertainty about a potential trade war, nuclear threats, and so on. Perhaps the markets will break soon, perhaps not. We won’t know until we see tomorrow’s news and information.
If you have a long equity position with which you are uncomfortable, a better way to reduce your risk is to change your portfolio asset allocation. Consider taking a questionnaire to determine your risk tolerance, which can begin to help you figure out how much risk you are comfortable taking. And try not to make current market headlines actionable. If you are investing for retirement, then what happens today or tomorrow is irrelevant. Focus on only the things that you can control and think about your long term goals. As always, a fee-only fiduciary investment advisor can help you figure all of this out so that you are relaxed about investing. Good luck.