Wednesday, March 18, 2015

Beware Leveraged ETFs: List of Leveraged ETFs for Traders

Here is a list of leveraged ETFs posted by Scott on Silicon Investor
I prefer ETFs that do not use leverage.  If you are day trading 1% of your portfolio into a 3x leveraged ETF, why not use 3% in a lower expense ETF such as DIA , SPY or QQQ?

This graph shows SPY vs. its 2x and 3x ETFs, SPUU and SPXL, respectively.  You can clearly see the slippage and the ratios sure are not 2 and 3x on a YTD chart with two months and eighteen days.

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This graph shows SPY vs. its 2x and 3x ETFs, SPUU and SPXL, respectively on a 5 day scale:

Warnings.  
  • Leveraged ETFs get leverage at a very high price so they can lose money in a flat market. 
  • I DO NOT RECOMMEND holding them overnight.
  • Leveraged ETFs are really only for day traders who believe they can make enough from market timing to offset the high expenses.


Tuesday, March 10, 2015

Gold Resistance and Support Levels - Three Key Charts to Watch

Resistance and Support Levels for the price of gold and its ETF GLD.   Gold may be bottoming at a support line I pointed out in my January 2014 article.  Feel free to voice your opinion at my Facebook group.


CDs are also a way to wait for higher rates... as unlike bond funds, you won't lose money in the short term if interest rates go up AND you can get higher rate CDs when yours mature.  I'd go with 1 or 2 year CDs as my guess is interest rates will be higher in the near future


Gold chart