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Strategies & Market Trends : Value Investing
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To: Dr. Ipsofacto who wrote (44308)9/12/2011 1:17:48 AM
From: Spekulatius  Read Replies (1) of 78773
 
re 2x or 3X levered index vehicles - it's not just the expenses that are killing these levered vehicles LT - it is the volatility that is doing it. By design these vehicles are buyers if stocks when stocks go up and sellers when stocks go down. They need to do this daily rebalancing to keep their leverage ratio on target. Now imaging you do this with your portfolio in a month like August 2011 - you will absolutely get killed in a zig-zag market.

Personally, I would just margin the SPY 50% if I really feel compelled to add juice to my bet, or in a IRA (where you don't have margin) add some options. But who need juice after all, if the market can move 3%+ from day to day?
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