Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
These are the times you want to believe in god and actually wish god to come down and strike down the 4x people. There are so many other things the world needs right now and this ain't it.
Anyone remember Potomac funds? They used to put out leveraged index funds with a multiplier of around 1.25 if I recall correctly. They made a big deal about how a higher multiplier just didn't pay off, between the risk, the cost of the leverage, etc.
They found that people wanted more sizzle. So they rebranded themselves as DireXion, went to 2.5x, and later upped that to 3x.
StockTwits is full of posters who plopped money into these high leveraged vehicles and got burned. Some even bought on margin which ended in catastrophe. Kids wanting to get rich quick but end up bankrupt.
Considering that an S&P 500 emini futures contract is about 20x leveraged based on the margin requirement...but I hope this fails. Everything that could possibly serve an investor has already been introduced.
Comments
Regards,
Ted
Regards,
Ted
http://www.investopedia.com/articles/financial-advisors/082515/why-leveraged-etfs-are-not-longterm-bet.asp
They found that people wanted more sizzle. So they rebranded themselves as DireXion, went to 2.5x, and later upped that to 3x.
This just looks like the next level.
Nick de Peyster
Undervalued Stocks