In this week’s Mullooly Asset Management video Tom and Brendan answer the question, “When are leveraged ETFs suitable?”. Many investors want to know when they should consider a leveraged ETF, but have not been able to find any answers. The most favorable time to invest in a leveraged ETF is when its sector is experiencing a positive trend in the long term. Here at Mullooly Asset Management we analyze point and figure charts that can tell us when sectors are in such trends. However most investors are not analyzing point and figure charts on a daily basis, so they don’t have this useful information.
Still wondering, “When are leveraged ETFs suitable?”, don’t worry Tom and Brendan discuss much more in the video. You should know that leveraged ETFs can be really awesome for investors when their sector is trending up. They can also do serious damage on the way down. One concept that investors need to understand is that these funds track daily moves. Tom explains how different leveraged ETFs can be 150%, 200%, and 300% of the daily move. Leveraged ETFs are definitely attractive investments for many people, however the proper management techniques need to be applied to see gains. If you have any questions about leveraged ETFs feel free to contact us here at Mullooly Asset Management.
