Comments on: This and That: Leveraged ETFs, Credit Card Legislation and More…

By: Lifecycle Investing Not Always Smooth (1/2) « The Value Indexer Blog

Lifecycle Investing Not Always Smooth (1/2) « The Value Indexer Blog — Mon, 23 Jan 2012 15:38:36 +0000

[...] to leveraged ETFs that do this every day. They are forced to buy high and sell low. As a result those ETFs can lose money any time the market has enough volatility, whether it’s rising or falling overall. At another [...]

By: Matt

Matt — Mon, 25 May 2009 15:14:33 +0000

Phil S, don’t you mean VW???

By: Canadian Capitalist

Canadian Capitalist — Sat, 23 May 2009 22:58:38 +0000

Squawkfox: Many blogs provide very short feeds. I still subscribe because I follow the posts and decide when I want to click through It sucks but considering the number of spam blogs that are out there, I’m sympathetic.

By: Fred (ETF2X.com)

Fred (ETF2X.com) — Sat, 23 May 2009 11:06:14 +0000

How many times will financial journalists and bloggers regurgitate what has been reported on ad nauseum about 2X ETF’s I wonder. If you haven’t realized that leveraged ETF’s aren’t designed and aren’t advertised as buy-and-hold products then you should come out from under your rock.

I use HBP’s product and I have beat the TSX by 34% over the past one year period.

Near the end of his article, Jonathon Chevreau notes a statement by Kirby that you may be better off shorting a leveraged bull ETF than buying the leveraged bear ETF. If Chevreau had put more effort into the article, he would have discovered that when you call a broker and try to place an order to short one of HBP’s ETF’s the broker will likely inform you that they don’t have any available for shorting. This is one of those great investment ideas that works in theory but not in execution unfortunately. Jonathon is very capable of writing more informative articles than this one.

By: Squawkfox

Squawkfox — Sat, 23 May 2009 02:13:12 +0000

I checked out Chaya Cooperberg’s blog, but she only gives a partial (ok, one sentence) feed. What’s the point of subscribing to get one sentence?

By: Bon Homme Cajun

Bon Homme Cajun — Fri, 22 May 2009 14:05:30 +0000

Thanks for the mention, enjoy the warm weather!

By: Thicken My Wallet

Thicken My Wallet — Fri, 22 May 2009 13:58:49 +0000

Thanks for the mention. I also blogged on leveraged ETFs and the structural issues of the constant leverage trap makes the produce undesirable for most retail investors.

By: Michael James

Michael James — Fri, 22 May 2009 13:44:39 +0000

Thanks for the mention! Have a great weekend.

By: Phil S

Phil S — Fri, 22 May 2009 12:45:15 +0000

I like the CONCEPT of Horizon BetaPro’s Bear ETFs, being a mutual fund of short positions, because it limits our liability if things go horribly wrong in a short position… An investor’s liability would be limited to 100% of whatever we put into it, not the theoretical INFINITE amount – kind of like what happened to Porsche shares several months ago when people trying to cover their short positions were caught in a squeeze as there were more shares sold short than what was in circulation. I don’t know if anybody remembers, but for one brief moment, Porsche became the largest cap company in the world – much more valuable than even General Electric, the largest corporation in the world.

But just like the article states, when I looked into their fees, it was really punishing! Back when I checked it out, I think it was about 7%! You had to make 7% on a bear position just to break even. I didn’t like the economics of that, so I stayed away, which is unfortunate because I think the market tumbled 30% since I looked at it. Oh well.