Re: Ultrashort ETF: Good if Feeling Bearish?
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I could be wrong but I think you are paying for that 2x short somehow. I think its supposed to closely match the daily movements of the index by -2x, however, I think holding this longish term is a guaranteed loser even if the market continues to go down over that time. I'm just guessing, but I think it would be similar to 1.95x the downswings, and -2.05x the upswings. Eventually the rake kills you.
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yea there was some post that linked a good analysis of leveraged funds and why they suck. i just did a simulation though and the returns of hitting the double value every day does result in the average long run daily value being about double the daily value...but i obviously didn't take many things into account.
Barron
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