Mark L

3 Comments

    • ON: Sat Apr 26th 17:06 PM
      Commented on:
      Ultra and Inverse ETFs: The Downside of Doubling Up
      Continuation

      re: Proshares posting counterparty note on their webpage, they have, under the Products tab in the right hand column, specifically stating that they have no Bear counterparty risk.

      further, here's a link to some additional discussion wallstreetexaminer.com...
      View article »
    • ON: Sat Apr 26th 16:39 PM
      Commented on:
      Ultra and Inverse ETFs: The Downside of Doubling Up
      Interesting comments on what's under the hood at proshares ultrashorts. My understanding is that the the futures swaps (e-mini, etc.) have as the primary risk that of counterparty default. Proshares somewhat mitigates this by limiting the single counterparty concentration to about 8%. I called them up right after the Bear collapse and they told me Bear was not one of their counterparties at the time of the collapse and they were in the process of posting a whitepaper on their website to address this concern. As soon as I finish this post I am going to check out the website to see if it was posted. I do think this is an important area that many investors have no clue about and they need to go in with open eyes, but at the same time, if understood, an informed decision can be made.

      Thanks again for good article and comments William Edwards
      View article »
    • ON: Sat Apr 26th 15:59 PM
      Commented on:
      Rebalancing Can Be Hazardous to Your Portfolio
      the only purpose of asset allocation for the long term - 25 yrs would qualify as in the article - is to control risk so that one doesn't get scared out due to a huge drop. If one doesn't rebalance to control risk, then it seems it would make much more sense to simply put 100% of one's portfolio in the asset class with the highest historical return and don't look at the statement for 25 years.

      The article seems to end up making 2 points.

      a) that tolerance based rebalancing is superior to time period based rebalancing - I agree with this - it decreases transactional/tax costs yet maintains the risk profile.
      b) it might be better not to rebalance at all - this i disagree with as noted in my comments above

      View article »
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