widestrides

Silver Trade Is Better than Gold

But silver crashed with stocks in 2008-09 while gold held up MUCH better. It could happen again.

The Case Against Leveraged ETFs

Soon, there will be MONTHLY leveraged ETFs and they will be designed to track the indexes x2 or x3 but on a monthly basis. This will help ease the concern about the compounding and volatility issues.

The Case Against Leveraged ETFs

To those who think these are a good long term investment for your IRAs, etc., I would say that if it trends your way consistently, you will do well, but if there is choppiness and volatility along the way, you would actually do better in the 1x ETF! It's just a matter of math and compounding.

FAZ and FAS are the perfect example or the perfect storm AGAINST 3x ETFs. First FAZ skyrocketed as the financials plummeted. But then it plummeted as the financials recovered. The result of that huge up and down wrecked both FAS and FAZ.

If the market goes up and down, BOTH leveraged ETFs will lose.

The Case Against Leveraged ETFs

Shorting both sides works if you expect up and down market for your time frame. But if the market trends one way, you will lose more on the uptrending one than you will gain on the downtrending one. If you've got deep pockets and can hold on until the uptrending gone comes back down, you will do well.

Why Leveraged ETFs Are Bound to Deteriorate

But wouldn't ANY volatile stock be subject to the same "decay?" If a biotech stock goes up 10% one day and down 10% the next, it also is not back to even. It has decayed 1%.

So it is the volatility that creates the danger, and true these leveraged ETFs are leveraged by design, but they aren't necessarily volatile. True, they have been this past year, but this has been a volatile year and a "perfect" storm to decay these ETFs. But if they trend your way or if you "rebalance" them yourself, you can take the decay out of them.

GL

A Gold / GDX Trade: Part III

Hmm? I was thinking the opposite - going long gold and short the miners. I see a repeat performance of the general market revisiting March lows and taking the gold stocks with them, but with physical gold holding up much better and maybe even rising as a safe haven. It's a pair trade that could actually be more than a hedge. It could win BOTH ways. Silver is the wild card as it followed the market down as it was viewed as an industrial metal, not a safe haven investment like gold. GL

The Problems with 'Hedge Fund Strategy' Funds

It might be good to define for your readers exactly what a hedge fund strategy is, or is supposed to be. I don't think everyone is in agreement on that. A hedge fund does not always hedge if that's what you believe they do or if that's what you believe is commonly understood. So what exactly do these ETFs say they will do? Do they just say we will go long and short as we see fit? And with what instruments?

Will Gold Revisit Highs This Week?

I like silver and mining companies, but am afraid both will go down with the market just like they did the last time. So gold may be the safer bet.

Why would you expect silver and precious metals mining stocks to go up this time when the market crashes or retests the March lows?

Why Gold Is Losing Its Shine

Bad timing for this article! Nice try.

Silver ETF Reaches New Inventory High

So how does it work? When investor demand for the silver ETF increases, rather than increase the price to a point where it would be at a premium to the price of silver, they increase the number of shares and therefore the amount of real silver to back those additional shares? So in this case, dilution is good? Can we be sure they have enough actual silver backing it? Is there an independent auditor? Or do they use futures for some of it?