%% Good question; i like silver @ these levels. And i agree with much of what you said. BUT stock etfs cash markets pay dividends. Dont you like the Ausie trader , named Mr Guppy ??Got his office flooded + said ''never confuse a high probability with infallibility''. WE dont ''know'', in advance; wisdom is profitable to direct.. Easier to make 30%[or 60%%] for a year than 5 or 10 years
You are actually correct. IF you were a superstar and bought on the LOW TICK on 2009 and sold on the HIGH tick on 2015, yes, it's almost a 20 bagger, or close to a 2,000% return. But hindsight is 20/20. The price chart will factor in the SPLIT, and it did in fact split 2 for 1 in 2013 as you correctly stated. But check out the volatility since inception: http://finance.yahoo.com/echarts?s=TNA+Interactive#{"range":"max","allowChartStacking":true} Take your mouse and scroll over the inception date of TNA, November 17, 2008. Forget about the price, you want to know the PERCENTAGE gain since inception. The historical price will be adjusted if there's a split. Now, take your mouse and scroll over the CLOSING price of today, June 3, 2016. Do you see the percentage return? It is roughly 495% (495.21% to be exact). That means if you purchased $1,000 worth of TNA at inception, AND you were able to hold through ALL of the brutal volatility, you now have about a five bagger. Indeed, this is why the fact sheet from TNA's prospectus says it's up 11.67% per year, BUT also that assumes that you reinvested any dividends and capital gains BACK into the fund. If you didn't, then the annual aggregate returns are slightly reduced, and you'd end up with, yep, around 500% since inception. If you go to Morningstar, you will see the return on TNA if you invested $10,000 at inception, and it's now worth about $50k, or again, 500%. http://performance.morningstar.com/funds/etf/total-returns.action?t=TNA®ion=usa&culture=en-US It's always fun to look back at history and say, "I could have bought XYZ on the low tick and sold it on the high tick." If we all could execute those trades, then we'd all be filthy rich, lol! Hope that helps. Cheers. SJ
Good points,ScalperTrender Joe i figure that mourning star[TNA] data is correct.I like leveraged ETFs ,ETNs with a good trend, in some cases-the bank hardly ever calls the loan. Also did you notice the S&P OUTPERFORMED TNA,ytd, 3 year,5 year?? Using that data, which i did.It looks like they reinvested dividends on the SPY[S&P 500] , since they said TR=total return. See what we mean on its harder to make those %% on 5 years??.-- They[none do mostly on TR=total return] did not even figure comiss+ slippage, or trader errors.....LOL
Ya, I saw that, however when you plot the price on Yahoo finance, it shows TNA outperformed over 5 years (add TNA under the Comparison tab to see the overlay). Yahoo shows the dividend, but I'm not sure if Yahoo considers reinvested dividends on the price chart? So it makes sense to evaluate total returns as you said, since NOT reinvesting the dividends will make an impact on overall returns. http://finance.yahoo.com/echarts?s=SPY+Interactive#{"range":"5y","allowChartStacking":true}
When you download the fact sheet from State Street regarding SPY, it has the following disclaimer: "Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs." So you're right, when factoring in TR, they don't take into consideration for commissions/fees/slippage. The annualized return on SPY going back 10 years is around 7%. https://www.spdrs.com/resources/materials/productLiteratureOverlay.seam
WHile we can't be certain of anything there is a high probability of the SP500 appreciating in the long run... so why not hold spxl? Volatility will be nasty, but if you're going to buy and hold, why not buy and hold?
There have been academic studies that point to optimal leverage for buy & hold (equities) is closer to 1.7x-2x. Over that and you start to see increasingly diminished returns as leverage ramps up.
There is an amazing amount of misleading or just plain incorrect information on this thread. Leveraged ETFs return 2 or 3X the daily return of the underlying. All of them do this almost exactly with little to no tracking error and no "decay" beyond the clearly stated fund fees in the prospectus. This means that the ETF is highly path dependent, and it's very possible that the underlying index could go up 10% and your 3X leveraged ETF could go down by 5% over the course of a month. The only thing you're guaranteed is that if the underlying goes up 2% in a single day, your 3X ETF will go up 6%. Over anything but a day, the fact that it's only tracking daily return means that your ultimate return is completely dependent on the path the underlying takes from point A to point B. It has absolutely nothing to do with "decay" or reverse splits, or any other factor than the simple fact that these funds track daily return. So for the OP, unless you rebalance your position daily or you want essentially random results, no, a leveraged ETF is not a good long-term option. Futures would get you what you want with similar leverage.