To the previous question, if you compare IYM to UYM on a 5 year chart, you'll see UYM didn't go up as far when it rebounded. However, if UYM (or MATL) take a steep dive in the next few months, then I'm guessing buying it really cheap might be worthwhile in the long run even if you can't tell how far it will go up. Who knows if or when the US would engage in more quantitative easing.
i bought this baby two years ago around here and stupid me rode it all the way up and back down. This market is crazy this shouldnt trade the way it is. I fuess like everything else you have to use stops or write covered calls to collect premium.
I made money on this but also lost due to crazy volatality. THis article seems to indicate how to play it. Unfortunately I dont have the kind of technical charting experience.
A couple of hours, a couple of days, maybe a few weeks at the most especially in an uptrend market. These leveraged ETF's get reset everyday, so you end up with price erosion. Never ever ever hold these ETF's for the long term. Pull up a chart for UYM, then compare against it's short ETF SMN. Look at the performance over 6 months, 1 year, 2 years. What do you see? You would think since the long ETF is up 30%, then only logic says the short ETF would be down 30%. Doesn't work that way. You want to hold something for a long time, i.e. 1 year, then invest in a Vanguard ETF.
I have been in UYM for several years and have made good money over that time holding on to it. The Beta is high and I have read all the posts about how this is good for hours or a few days, which is all baloney. Just pull a one, two, or three year chart of the price action and that wil tell you what you need to know. The action can be volatile, especially in markets like the last week. It is certainly not an investment for the faint of heart, but again go back to the charts. I sold off before the downgrade, waited while the market crashed, and then slowly bought back in at a significant discount. Does that make my price right? Maybe not, but I do know that 32 is a great price considering this was a 50-70/share ETF a few day/weeks earlier. I also consider the underlying investment. I happen to like Freeport, Dow, and the chemical group. so this ETF works for me. Do your own DD and then invest, or don't, based on what you know.
My call...this is a good buy as it approaches 30 and a hold to sell as it gets into the 50's