By the way, to maintain your sanity, you should not have all of your money invested in XIV. You can probably get compounded 12-15% returns in MO or RAI over a long period of time without all of the risk associated with XIV
I don't see how anyone could possibly answer this question unless they guess. I believe that VIX futures have only been traded since 2004, so there's no way to determine just how far XIV would drop during an extended economic depression, such as the Great Depression.
However, I can tell you that most of the time XIV will likely be in an upward. However, when there are economic shocks, XIV will often quickly drop 50% or more.
XIV is not a long term buy-and-hold security. Instead, I think that the way to make money on XIV is to periodically re-balance a position to lock in gains when XIV has appreciated or purchase additional shares whenever XIV has decreased in value. For example, if you initially invested $20k in XIV, you could re-balance your position back to $20k every 6-, 12-, or 18- months, or whatever your holding period is. Provided your holding period is not too long, you will probably sell shares during a re-balance (e.g., because the price of XIV has increased) more often than you buy shares during the re-balance (e.g., because the price of XIV has decreased).
I cannot believe how poorly EWZ has performed and it only seems to get worse. Is there any doubt that EWZ is going to dip below $20 in the near future? It is really hard to believe that EWZ actually closed at $49.80 on 9/10/14, just one year ago. EWZ also closed at $70.91 on 9/10/10, five years ago.
I would like to think that we are at the capitulation stage, but I've thought that many times during the past five years and have been wrong each time...