George Simone

Wall Street Witch Hunt: Financials

Re Aalan's comments on speculative ETF picks:
Obvously, he knows what he is talking about, but he is wrong claiming that holding triple or double inverse ETFs for more than a day or two is either wild speculation or bravado, but not strategy. There is a long list of inverse ETFs that have investors who had the insight to buy and hold these things months ago laughing all the way to the bank.
There is the Pro Share ULTRA Short Financial ETF - SKF, which if bought at roughy $80 a year ago could have been sold last November for $260, and even last Friday January 16 was still trading around $150. Or take the DB Commodity Double Short ETN - DEE. If bought last July at around $20, it could have been sold last Friday January 16 at $80. If bought at $60 at the beginning of last December, the DIREXION Small Cap Bear ETF - TZA sold at $140 by the middle of the same month.
There are many more examples like these which prove that holding inverse ETFs for longer than a day or two does pay if the trend warrants it. There are those of us who believe that if trading unleveraged ETFs or ETNs is good, then twice the leverage has to be better and three times better still. Leveraged ETFs with their daily rebalancing and greater volatility can work to a trader's advantage, "BUT" only on the right side of the market, be it short or long such as during periods of steady increases or declines of the underlying index. Be on the wrong side, and leveraged ETFs will quickly turn into weapons of portfolio mass-destruction.
This is why it is so important to constantly monitor support and trend-momentum of the underlying index and see when, how or even if a trend is developing.