Hi smart traders I'm doing a project and have done extensive research on many instruments. Naturally I am ignorant and need your sound knowledge please. Assume the S&P increases over the next decade what would be the best investment with the highest return involving little capital ($10,000 ) I thought about Shorting VIX Shorting GLD ( options ) Buying Reverse gold etf buy cheap S&P index trackers Are there any instruments that are actually cheaper that can provide a greater return? Your help would prove so valuable please
Kind of a biased question. A couple of those trades could kill you in the short term and you'd still be right in the long term. If all you had was $10,000 and you expected the S and P to rise - and didn't want to enter into a trade that could wipe out your capital in the short run - consider buying SPY or a surrogate like the very low cost S and P clone ETFs at Vanguard/Schwab/Fidelity, etc. Reinvest the dividends.
Trade ES, you can buy 1 contract at a time and increase that size as you move up the money ladder. Hold for 4 to 5 weeks at a time or medium term.
It just isn't going to. We are going in a recession for most likely three years. There is more transparency now than ever before. Connect the dots.
Since your assumption is around the S&P, the gold trade makes no sense. Shorting VIX, you have to use VIX products, Is hard with only $10,000. I'd focus on the pure play, an S&P product. With that sid, only you can determine how much leverage to use. Timing with highly leveraged products might not allow you to hold the trade for the entire 10 years. You can: Buy SPY BUY SPY Options Buy ES future Buy ES Options Buy SPX options (I left out selling puts as that is hard with $10,000) SPY would be the least risky and most likely to last 10 years. SPX options would have the most risk. With only $10,000 and current margin requirements, it is most likely you can have the highest risk and leverage with Options on ES. That also means that you can lose the $10,000 way before your 10 year time period. You will never get a "best" response without more assumptions. Bob
What have you done to protect or make money from that if you are correct? BTW, the question was based on an assumption, not an expectation. I don't expect wajo111 to do anything.
You're missing an important question. You're asking about what if the S&P does rise for 10 years (and I think it's possible and would very much like it to). But what if it doesn't? That's the question you need to ask. You can discard a few of those ideas out of hand by simply considering them that way. Figure out what you can stand to lose if you're wrong, and use that as your main selection criteria.
If you are just looking to invest, then just buy SPY or equivalent and forget about it Alternatively if you want to be aggressive and OK loosing this money, go out into jan of 2019 and buy something like 265/285 spy call spread for for $7.50. Use not more then 50% of cash, it will give you plenty of upside so, 1 Spread costs you $750, so I'd buy 5, that will leave you with 60% cash. if market rallies and you spreads are worth over $12, start closing them. If market drops and you can buy cheaper, leg in slowly, always keep cash aside. market drops, you buy 2-3 spreads, it rallies you sell some 2-3 spreads. Once you get closer to jan, roll your spreads out and keep rolling them and stay at least 6 month out. You can change some parameters as you see fit and adjust to the conditions, but you get the idea, stay 50% cash, stay out in time, take off when you made money and add if market drops. VIX and gld have nothing to do with where spy will end up in 10 years...