https://beforeyouinvest.ca/2009/09/leveraged-exchange-traded-funds-etfs/ A Guide to Safe Investing and Fraud Prevention from the Nova Scotia Securities Commission Sat, 30 Apr 2011 23:20:20 -0300 http://wordpress.org/?v=2.8.4 hourly 1 https://beforeyouinvest.ca/2009/09/leveraged-exchange-traded-funds-etfs/comment-page-1/#comment-113 JoeTaxpayer Thu, 17 Sep 2009 22:42:40 +0000 https://beforeyouinvest.ca/?p=354#comment-113 I wrote about leveraged ETFs some time ago http://www.joetaxpayer.com/etfed/ The issue being they are calculated day to day, but cumulatively they will not return twice the underlying index. An inverse leveraged index, when the underlying index was down 50% for the year did not return 100%, but only 10%, a completely useless ETF for anyone with a time horizon of more than a few days. Imagine being right in forecasting the market and not even getting 1/10 the return you expect. Joe I wrote about leveraged ETFs some time ago http://www.joetaxpayer.com/etfed/
The issue being they are calculated day to day, but cumulatively they will not return twice the underlying index. An inverse leveraged index, when the underlying index was down 50% for the year did not return 100%, but only 10%, a completely useless ETF for anyone with a time horizon of more than a few days. Imagine being right in forecasting the market and not even getting 1/10 the return you expect.
Joe

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