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  • Bogle: Investors 'Getting Killed' in ETFs [View article]
    I think you need to consider ETF's (particularly the 2X or 3X and inverse ones) as tactical weapons that you use on short term, momentum oriented trades that are linked to periods of high volatility in the market.

    I do not consider them to be buy and hold trackers of an industry group or index... many have options underlying the strategy and the ETF will suffer its own version of time decay just like options do as it reprices.

    If you get a big move going on the underlying market they cover, as we saw last Fall (down) and this Spring (up) pile on and ride it hard, then get the hell out because the smart money is doing so too.

    Even the 3X stuff like FAS and FAZ is warning in their new prospectuses that they are meant as day trade type instruments - TACTICAL, not Strategic.

    Get in fast once the move has started, get out faster before it has peaked.
    Jun 19 10:50 am |Rating: +1 -1 |Link to Comment
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