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  • The Pitfalls of Using Inverse ETFs [View article]
    These ultra & ultrashort ETFs are extremely dangerous if you hold them for any length of time. Run some charts and you will see.

    Examples, 1/1-12/29/08:
    China: FXI and FXP are both down 50%.
    Oil industry: DUG is down 25% and DIG is down 75%.
    Financials: UYG is down 85%, SKF is up 25%.
    Real estate: URE is down 80%, SRS is down 45%.

    DOG (ProShares 1x short Dow 30) is up 20%, DXD (same except 2x) is only up 15%. The single-leverage did better than the double!

    If you hold on to these ETFs for more than a few days, you are on a losing track. Beware!
    Jan 03 01:29 am |Rating: +3 0
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