+ Watch TECL
on My Watchlist
Leveraged ETFs inherently decline over time due to how they are structured.
it is outrunning S&P500
Tecl has been lagging...Just playing the rotation with some leverage.
Leveraged ETFs will lose money due to extreme commissions (from trading illiquid derivatives daily) and constantly buying high and selling low.
Long steady ride to highs from being pulled by apple, IBM, qualcomm, this 3x has too much premium built into continued steady appreciation thus must fall as these high option costs will eat up value over time
This kind of triple ETF will always underperform over the long run due to the way it is constructed. Note: I am not saying you cannot make any money holding this ETF, just that over a prolonged time it will lose money.To prove my point, I now have harvested positive scores on 10 of these ETFs and their inverse versions since the beginning of this month.
When you look at the internal costs and statistics of these leveraged instruments, they must all underperform the market over time. If I could, I would short them in real life.
It is late August, is the market going to crash? Is it safe to short 3x bullish shares? Does their internal inefficiency warrant a short of their shares? Will some of these balance my shorts in 3x bears?
I believe the markets will be flat to lower over the next few months. Lots of volatility. The contango will be killer on this Daily 3X.
growth in the US economy needs banks
Ultra-shorts and Ultra-pros are all bad investments due to daily rebalancing
drop these markets!
When the overly optimistic FOMC says that household spending will be "constrained" by sluggish income growth, ongoing job losses, lower household wealth, and tight credit AND Shanghai stocks hit a seven-week low, then you know this bear market rally is finally over!
QUICK! Pick a reason to exit a market that has risen too fast and gotten too expensive. Here are three to choose from: buying power is getting exhausted according to DeMark indicators; daily sentiment indicators are 88% bullish; RSI’s and oscillators are over extended.
3x leverage on the upside for an overbought market. not to mention the fact that Tech acts as a sort of ultra on the stock market as is. Even if the market does not drop as I expect over the next few months the leverage will destroy them in the long term
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