I traded in/out of BEARX made times..but one year ago I completely stopped using BEARX to short the markets
Why?
Because people smarter than I on THIS website schooled me that BEARX is rather expensive (fee-wise) AND inefficient (muddy, uncertain inverse response to markets).
Plot BEARX on the same chart with the S&P500 and NASDAQ and see what we mean; you will NOT see a line that is a mirror image of two other lines.
I thank those Piggington people for schooling me on that topic, because since the market top (Oct. /’07) I made a lot more money buying ProShares inverse ETFs than I would have if had I made the same trades with BEARX.
Are you aware that BEARX will move in/out of significant gold positions?
(Yet, it is difficult for BEARX “investors” to know when this is being done)
If you want to go long gold, either buy physical gold, or buy the gold ETF “GLD,” or buy the mining stocks. All are more efficient than the difficult-to-decipher gold hedging BEARX does.
Of course, primarily BEARX focuses on shorting stocks.
Want to short the US stock indexes? Go with either a 100% or 200% INVERSE ProShares ETF. (But be careful! Guess wrong on market direction and those leveraged ETF’s will turn and eat your portfolio like a pack of ravenous wolves! Check with your licensed financial adviser; maybe you’ll get VALUABLE ADVICE, such as “Never put more than 25% of your retirement portfolio into a bear fund.”)
Now I would be remiss if I did not REMIND YOU that NOW is a VERY RISKY time to buy short market funds! We are down 36% on the S&P500 and 37% on the NASDAQ.
Are you a sheep or are you a sheep-shearer? Always ask yourself that question before every trade! You are getting ‘round to asking us about short market funds one year late in a market that’s already fallen ~36%.
You my friend are a bleating, fuzzy sheep, at least on THIS proposed market play! Sheep get sheared and some get slaughtered!
I spent the day thinking about how to GO LONG stocks so I can slice and dice up some sheep. (I sold my ProShares short ETF’s two weeks ago. I bought them one year ago.)
My advice? Stop thinking about going short, and stay on the sidelines. The safe play is to wait for this market to bottom, and a good guess is that will happen in the first half of next year (when the full depth of the recession/depression is priced in).
OR maybe a better rule is to start buying when the markets are off by at least 45%. Who knows – we might see that NEXT WEEK, or TOMORROW! (instead of next year)
Then at that bottom, go with the Value Investing approach of buying quality stocks long at the bottom of this bear market.
…And hire Rich T. (our Fearless Leader, and manager of this fine website) as your financial advisor. Don’t confuse me with Rich T. who is MUCH smarter, and he’s also licensed to give financial advice! I’m only licensed to bullshit.
