LOL, what a laugh that the previous post says real estate is improving. This ETF is all about U.S. real estate, not global (if indeed that has any "green shoots" as well!) Please don't insult our intelligence with nonsense about how great the real estate market is... some of us work in that field, you know!
BTW, both the 2X long and short ETF's are not about holding another year until the market recovers. They are about daily trading only.
Do the math - an ETF valued at $10 goes up 30% one day and drops 30% the following day. Your $10 "investment" is now worth $9.10. Do this at smaller increments over and over for many time periods and your "investment" goes to pennies. Gotta laugh at the posts touting this as a long term hold!
Real estate in the US is in fact "improving". The rate of change of foreclosures is decreasing, which IMHO is an improvement. It is just a matter of time when real estate will come back because it is a cyclical industry, albeit the cycles are much longer. If you wait to buy US real estate stocks AFTER real estate has stabalized, you will have missed much of the move. You may catch the top 30-50% of the move, but the idea is to buy cheaper so that returns are maximized.
Oh BTW, everyone keeps touting that 2X and 3X are not long term buys because a 30% rise followed by a 30% decline would be detrimental to your equity capital. True, but what if the trend is upwards. You will definitely be much better off. In other words, if you have a 30% gain, followed by a 10% gain followed by a 5% gain followed by a 20% loss. Do the math - you will be much better off.
Then the key to buying 2X's is recognizing when their prices are as low as they will go. It's easy to say buy an ETF at its low, but you can only recognize the true low point after you have passed it. A better rule is to ignore all the talking heads on CNBC and the releases from the various government agencies telling everyone that things are thus and so. The suits paraded in front of the cameras always have vested interests they're trying to advance, and all the releases from the government are constantly revised after a few weeks or a few months. The holly grail of investment advice is what the private economists say who work for the biggest companies in this country (yes, the big guys hire their own economists to advise them of what to expect in the coming months.) Since this information is highly secret and proprietary, we little guys and gals have to do the next best thing, and infer from their actions what's on the horizon. When they start hiring and expanding, we've reached our low. So, the question is - who's hiring and expanding these days?
So far we're still in the middle of what could be a major correction on the broad markets. Institutions have been pumping money back into money markets lately and the EUR/JPY has broken under major support. Both ominous signs for the markets. We're currently sitting in a low base. A strong move beneath yesterday's lows could turn ugly.