I'm in the SF Bay Area and thinking of buying a house in around 4-5 years. I could buy now, but I'd rather not stretch, plus I think RE is overvalued in general and especially around these parts. As insurance in case I'm wrong, what if I were to buy and hold DRN 3x real estate bull ETF? Or to avoid the whole contango cluster, what if I used options instead?
Leveraged ETPs are not made for long term holding due to the path dependent nature of their pricing. DRN will track 3x the daily return, not 3x the overall return of the index. If you want long term exposure to REITs, avoid leveraged funds.
I'd suggest IYR because it is: 1) optionable, 2) liquid in both the underlying and options, and 3) non-leveraged.
============== Well you have some good thoughtful points.Actually its real easy for REALTY to get overextended, over priced near or in ANY big city. Ever though about a long commute??; I think Don Bright Trading has an office in Nevada. Not that he commutes to bay area, from silver state,LOL. See my point??.Trend is friend. Some still price CA land like there is gold in them thar hills,LOL Toyota moved from CA to Texas.....................................................................................................................................................Amen
being at the end of a losing trade doesn't make you dumb. being at the end of a winning trade doesn't make you smart. i leave it to you to figure out what smart trading is about.