Understanding Leveraged ETFs

You’ve probably heard about leveraged ETFs: Funds designed to deliver twice or even three times the return of their benchmarks.

Just last week, ProShares launched the first triple-leveraged ETFs tied to the S&P 500 index. ProShares UltraPro S&P 500 (UPRO) is a 3x ETF for bulls, while ProShares UltraPro Bear S&P 500 (SPXU) is a 3x leveraged inverse ETF.

What a deal! Wouldn’t it be great to double or triple your gains? Far be it from me to throw water on the party, but I have to tell you it’s not quite so simple.

Yes, leveraged ETFs can be very useful in some circumstances. But before…

Momentum Investing: The Secret to a Red-Hot Stock Portfolio

The investment landscape isn’t pretty right now.

The federal deficit is ballooning. Credit is tight. Home prices are still falling. The dollar is weak. Fuel prices have jumped. The economy is in the tank. And last year the stock market experienced its worst year since 1931.

Who in his right mind would buy stocks now?

I would. In fact, it’s only because so many investors keep repeating the mantra in the paragraph above - as the national media does endlessly - that they don’t.

And when they realize how many momentum investing opportunities they’ve missed, they’re really going to regret it.

So do yourself a…

How Managed Futures Can Put You Back in the Black

While every investment asset class struggled mightily during 2008 - the U.S. stock market alone eradicated $7 trillion in shareholder wealth in its worst year since the Great Depression - managed futures provided investors with a significant bright spot last year.

Managed futures programs - alternative-investment vehicles that enabled professional money managers to take positions in a wide variety of securities and derivatives - posted strong returns in a year that was marked mostly by investment losses. The average managed futures program returned about 14%, according to the Barclay CTA Index, and 11.4% as measured by the Stark 300 Traders Index.  By…

Short Selling Strategies: How To Avoid The Short Squeeze With Put Options

“Investors are worrying that a three-month surge in stocks might be overdone.” - So read a piece of market commentary from the Associated Press a few days, as the Dow, S&P 500 and Nasdaq all slumped.

Thanks for the heads-up, guys. You’re about two months too late. Not only did we call the bear market rally before it began, we’ve also spent the past couple of months warning you not to get swept away by the sudden surge of optimism and over-confidence as stocks have pushed higher.

Bear market rallies are fun while they last. But they’re only temporary. And the last week of…

Do The Companies In Your Portfolio Have Strong Management Teams? This Gauge Will Tell You…

Measuring Momentum Through The “Return Ratio”

When powerful momentum stocks are charging upwards, it can be difficult to know when to get on board.

But it’s not as difficult as you might think.

If you want the inside track on the best momentum stocks with ultra-explosive gains, just focus on one of the most useful financial ratios around.

It’s called return on equity (ROE).

ROE is one of the best measures of a corporation’s profitability. It shows you how much profit the company generates with the money shareholders have invested. Let me show you how this number works - and how profitable it can be.

Digging…