Long VIX is akin to being short stocks in my book. Fine when share prices are heading south fast, not so good as a long term holding (decay). Its also like a highly leveraged position, I broadly assume being equivalent to a 5x leveraged position and revise exposure accordingly (1/5th scale, so $10,000 instead of $50,000 that might otherwise have been invested in 1x (stock)).
I personally avoid long volatility and hold the opposing side (short volatility) i.e. XIV as that captures contango benefits and has a broader upward reward expectancy over time.
Something along the lines of 40% stock, 30% gold, 30% hard cash is somewhat 'bond' like. XIV is somewhat 5x long stock like. So a synthetic 1x long stock might be held as 20% XIV (being somewhat 5x long stock like), 80% bonds. If bonds are held as 40/30/30 stock/gold/nowt then overall 20% XIV, 32% SPY, 24% gold, rest in cash (SHY). Which since 2011 produced a 14% annualised compared to 14.1% for SPY (total gains/dividends reinvested).
In short, take care with VIX Steve, playing with fire is ok provided you know what you're doing and take the appropriate precautions (think of a number and divide it by 5).
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