Jonesz

5 Ultra Low Priced Summertime Stock Suggestions

You SHOULD NOThold 2x/3x funds ala FAS for the long term as the returns are mirrored on DAILY movements. For example if an example "single levered (1x) FAS" goes down 10% in a day (i.e. $1.00 to $0.90), real FAZ would go down 30%..i.e. from $1.00 to $0.70. The next day "1x FAS" goes up 11.1% it would be back to $1.00. 3x FAS would, in turn, go up 3X that, or 33.3% and would then be at $0.93. So, even though the market is back where it started two days ago, you are still out 7% on your investment. This is why volitility absolutely KILLS levered ETF's. The more up and down volatility you have, the more the inherent nature of the daily levered ETF eats away at your investment.