Re: Ultrashort ETF: Good if Feeling Bearish?
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I would stay very far away from these investments.
First, stocks have a positive expectation (derived from the risk premium). Shorting an asset with a positive expectation is -EV.
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this is very poor reasoning.
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Second, these leveraged ETFs are only trading instruments. Do not hold them for long periods of time. They only capture twice the daily returns, but capture much less over the long run.
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yup. i failed to capture that in my rudimentary simulation but that is definitely the case.
Barron
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