I was just thinking about this post and wanted to add an update; on Friday, I bought the same dollar amount as my first purchase on April 13. My average cost per share now is $13.81. The current price is $11.05. I am steadfast in my belief that cost averaging down on NUGT will make you a substantial amount of money, when this thing turns upward. $40 price target.
Some thoughts from today:
If you want to make huge returns in the market, you need to possess a few things. Two of the those are the willingness to gamble and the ability to measure the risk/reward ratio.
Let us look at NUGT-3x ETF Bull for Gold Miners.
Down about 18% today, 10% yesterday and 5% the day before that.
67% year to date
and 75% year over year.
A little oversold? Definitely-But lets face it, it's also a little scary to think about buying shares of NUGT and risking your precious, hard earned dollars.
These shares could easily go down a little further.
But at the same time, this situation has opportunity written all over it. When these 3x ETFSs reverse, they come roaring back in a big way and can double in a couple of weeks. The nearest resistance above its current price of $16.59 (after hours) is $40.
This opportunity exists because of the fear of loss that is always omnipresent on Wall Street. You should embrace this fear and capitalize on it. In a case like this-it is good to remember that you would not be buying an individual company with iffy fundamentals-you would be buying an entire industry (gold mining) that is in relatively good shape financially.
This is a good time to mention that, as a rule, you shouldn't put more than 5% of your portfolio into any one position and that it's a damn good idea to scale in.
I used to say to myself-"screw that 5% rule". But, I have learned 2 things from following that rule-One is that it allows me to play around with at least 20 different investment ideas at one time and the other is that I'm not staying up at night worrying about any one particular stock that is going south on me. Trading should be fun, not nerve wracking.