A.I.M. Users Bulletin Board

[ls7550]

RE: LETF's

I buy and hold 'em, and have done so for a number of years now with a substantial part of my total 'stock' portfolio.

When compared in equal capital amounts invested in a 3x and 1x, picture it as not a expectancy of providing 3x the return over the mid to longer term, but rather more broadly like the same return, but 3x the volatility along the way.

The manner in which I use them is to drop a third into the 3x of the amount I otherwise would have invested in the 1x. Primarily for taxation benefits.

For the remainder two-thirds 'bonds/cash' I prefer a barbell of two extremes, stocks and gold 50/50.

With 2x you can get away with rebalancing back to target weightings once each year or so. With 3x you should rebalance more frequently, 6 monthly is fine with me

See here