Leveraged exchange-traded funds (ETFs) pose several dangers for retail investors tempted by potential high returns in a short period of time. High expense ratios and decay are big issues for leveraged (ETFs). These two factors alone eat into profits and exacerbate losses. This is not how you want to invest. (For more, see: 澳洲幸运5官方开奖结果体彩网:Introduction to Leveraged ETFs.)

However, there is a bigger problem with leveraged ETFs. They can entice those prone to gambling. Since greed can be a driving force of human nature (for some), there is going to be demand for leve👍raged ETFs. Some retail investors look at this way: Why wait a year or more for a 10% return when I can have it in a day?

That might appear to be a salient point, but retail investors who invest in leveraged ETFs are ignoring the cardinal rule of investing: 澳洲幸运5官方开奖结果体彩网:preserve capital. Trading a leveraged ETF is no different than going to a roulette table. It is impossible to time the market. Sometimes you win and sometimes you lose. The problem is that the house never runs out of money on a cold streak, but you will. Retail investors, as opposed to a traders, should avoid leveraged ETFs. (For more, see: 澳洲幸运5官方开奖结果体彩网:Top 5 Reཧasons to Keep Leverage൲d ETFs to the Pros.)

Fundamentals

If we rewind 20 years, investors sought out companies based on 澳洲幸运5官方开奖结果体彩网:fundamentals. Either they were investing in 澳洲幸运5官方开奖结果体彩网:cash-flow strong 澳洲幸运5官方开奖结果体彩网:dividend-paying companies that could offer steady returns or they were investing in 澳洲幸运5官方开奖结果体彩网:small-cap stocks with tremendous long-tꦺer🍰m growth potential. That’s investing.

Will investors move away from leveraged ETFs and investment returns being driven by 澳洲幸运5官方开奖结果体彩网:Federal Reserve policy, such as prolonged low interest rates, and back to investments being based on fundamentals? Savvy investors have completely ignored both factors and have done well. (For more, see: 澳洲幸运5官方开奖结果体彩网:Wh💯y Leveraged ETFs Are N🌱ot a Long-Term Bet.)