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Strategies & Market Trends : Dividend investing for retirement

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To: Elroy who wrote (20161)	6/28/2014 11:06:12 PM
From: JimisJim	Read Replies (3) of 34328

Leveraged ETFs/ETNs (2X and 3X underlying indices) are black holes... has been discussed many times here and elsewhere on SI and many articles/analyses referenced show that leveraged ETFs/ETNs underperform significantly over long time frames... has to do with how they achieve leverage, using derivatives and options, and they "reset" every day at close... only appropriate way to play them would be to short negative leveraged ones, but still risky, IMO... otherwise, leveraged funds/notes are only for day trading as that is exactly what the funds do to achieve their leverage. OTOH, standard, non-leveraged EFTs (or at least many of the respectable ones) are more like mutual funds that trade in the stock market and might provide diversification for someone unwilling or unable to build their own basket of stocks and willing to pay the fees for that convenience.

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