I bought RYTPX and RYCWX with 10% of our retirement portfolio (I used my entire account, as my husband has his own account through work; he is adding 10% of his account to the Rydex funds).
I called Rydex because of a bad experience with bear ProFunds. The Profunds prospectus did not say anywhere how they invest their money, i.e. options or shorting, etc., and I e-mailed back and forth with them multiple times and could never get a straight answer. I verified each of the Rydex funds since inception to ensure they do indeed track the inverse of the index, and after it all checked out, I made the move.
I do not claim to be a perfect market timer. When Chris congratulated me earlier this year for making some money in gold, I admitted it was pure luck. I got out of the stock market in March, and missed this last rally. Please don’t confuse my conviction about the direction of the economy and my long-term investment positioning, with any claim that I am a good short-term market timer. If you want good short-term market timing advice, you need to talk with Chris Johnston. He knows how to make money on a rally in the middle of a bear market; I do not.
This investment does have some risk. The stock market rally could go on for a few months longer. If the stock market sizzles out next week, it will be pure luck for me. I am very confident in the long term direction of the economy, but not of the short term moves. However, without risk there is no reward. I also convinced myself that someone who is in the stock market now, say in an index fund, is taking an even greater risk than I am. The stock market has a greater chance of going down, since we’re going into a recession, than it has a chance of rising. Also, the bear fund seems less risky than shorting or put options.
