Riding Up Market Winds with Small to Mid Cap ETFs

With the gyrations of the market over the past couple of weeks, many investors are starting to look at options for getting back in. Wall Street has given investors and speculators alike some tantalizing reasons to “jump in the swim.”

While the markets have moved up almost 10%, a number of stocks have done considerably better. In the past, small caps have made up the biggest gainers in any new bull market – and there’s no reason this shouldn’t continue.

Small caps are the “red balloons” of the investment world. Their size allows them to take advantage of “wind currents” faster than their larger brethren. Continuing our analogy, mid caps are represented by weather balloons and large caps by hot air balloons.

Each has its advantages, and all have historically moved at a consistent rate during turnarounds – Small first, medium next and then large. It’s why we’re focusing on small to mid-caps for their speed and “first mover” advantages.

If you’re looking for an aggressive way to ride the markets back up, consider Direxion Small Cap Bull 3x Shares ETF (NYSE: TNA). It’s designed to produce three times the return of an “up” market.

But if we’re moving into a protracted up cycle, the mid to large caps should see some big gains as well. Take a look at Direxion Mid Cap Bull 3x Shares ETF (NYSE: MWJ) and Direxion Large Cap Bull 3x Shares ETF (NYSE: BGU).

As always, the potential for greater reward comes with greater risk. These funds use leverage and can move down much quicker than they move up. For those looking for a safer route, index ETFs can fill that need.