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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Steve Felix who wrote (3963)	3/1/2010 8:13:49 PM
From: JimisJim	Read Replies (1) \| Respond to of 34328

Yes, IMO, and after much discussion on other boards, I've concluded that inverse ETFs (and many others) simply are not good for LT investments -- there appears to be too many ways for money to "leak" out of them and it always comes down to the language concerning matching the performance of the underlying index/securities/whatever as they tend to buy/sell derivatives and such to mimic directional movement and many of them essentially "reset" every day and then buy/sell more the following day to try to mimic the direction/performance of the underlying... etc. rinse, repeat every day... I've concluded that these are ONLY appropriate for very short term trades and/or day trading and that the longer one holds them, the less return to expect... indeed the more one can expect to lose if they are the 2X and 3X ETFs. Jim

To: Steve Felix who wrote (3963)	3/2/2010 12:51:18 AM
From: Bread Upon The Water	Read Replies (1) \| Respond to of 34328

"Just my take, but over any extended period of time these funds remind me of Ms. Pac Man and will eat any longer term insurance premium." It depends doesn't it on when one enters and what the market does. For instance, buying a hundred shares each of SKF and RFN today would run you a little under 3k. But if the market were to repeat last March those two funds would be worth about 35K. So you are getting better than 10 to 1 leverage against a financial armageddon. I hope it doesn't happen, but if it does I come out if it able to walk. Whether that is worth it or not I guess depends on what one is seeking from the market.