Hi Allen,
For what it is worth:
I went over to PerfCharts to see how the leveraged ETFs performed compared to non-leveraged ETFs. At PerfCharts the ETFs I compared allowed me to go back to August 4, 2008. I believe that the majority of the last bear market meltdown was included in these results:
+130.27% SPY (non-leveraged)
+303.36% SSO (2X leveraged)
+451.25% SPXL (3X leveraged)
Now then, if I move the slider over to March 10, 2009, which I believe was near the bottom of the last bear market, it shows the following results:
+230.22% SPY (non-leveraged)
+745.02% SSO (2X leveraged)
+1,751.81% SPXL (3X leveraged)
I am no mathematician, but to me it shows that the compounding done in leveraged investments compared to non-leveraged is dramatic, both on the way down as well as the way up.
I have begun to have a fondness for using leveraged ETFs in LD-AIM programs. Personally I don't want to tie up a lot of my meager capital using leveraged ETFs in regular AIM programs. Don't know if I will have the same fondness if we happen to go back into a major bear market as we did in 2008-2009.
Best regards,
Ray
