Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: posthumousone who wrote (269267)	8/15/2010 2:14:20 PM
From: yard_man	Respond to of 306849

ask patron -- he likes that one -- my only reservation is, if it has Reits, how does that affect the value as the payouts are made?

To: posthumousone who wrote (269267)	8/15/2010 2:18:26 PM
From: James Hutton	Read Replies (2) \| Respond to of 306849

If you haven't held SRS, the first thing you should do is look at the table in the SRS prospectus that relates index performance/double index performance and volatility. That should scare you into never holding this thing more than a few days unless it is going straight up. SRS is simply an double inverse of IYR, which contains, at least last I checked, at lot of REITs. If you're looking for a double in SRS in the next year, you would need the IYR to go down at least 30% with volatility at 10% (unlikely) or the IYR to go down at least 40% with volatility less than 40% or so, etc. Note that the average five-year volatility of the index is 46.35%. To get a double at that volatility, the IYR needs to go down at least about 50%. If the index goes down 50% and volatility stays at 10%, you don't just get a double, you get a 288% gain. Crazy, huh.