INVERSE FUNDS (again) (sorry!)
We pretty much beat to death the discussion of using inverse funds as the cash reserve or the inverse (pun intended) of AIMing an inverse fund and using the regular fund as the cash reserve and decided it just wasn't worth it.
But I have had another thought that maybe some of you can comment on. (remember I am Toofuzzy)
I have an industry diversified portfolio of 10 ETFS. In this market EVERYTHING is down and I don't like that. Nothing is throwing off cash so I can buy what is down.
So my thought is that when the market goes up and I have a few sales, the V-wave is approaching 60% (or other wise high), and the market seems to have some froth, to start some new AIM accounts with inverse funds of the funds I already hold.
From that point on the idea is to AIM those inverse funds forever, separately, and with their own cash reserve.
1) will that work or is there inherently some reason to only use the inverse funds short term?
2) should I stay away from the 2x funds? (the account could start with half the amount in the fund they are the inverse to)
3) Other that using the funds with the higher volume, any thoughts on using one particular fund over another where there is a choice?
4) Any thoughts on dropping the ETFs I have now and using the + 2X funds to AIM now, while I wait to start the inverse programs.
5) What effect would this have on the value of my account over time? I would think it would be better since I am NOT AIMing one against the other.
I wanted to stay away from QQQQ and SPY as that would just duplicate my other holdings.
Here is what i was thinking
IYM (or + 2x UYM) against -2x SMN (no regular inverse)
IYK (or + 2x UGE) against - 2x SZK ( no regular inverse)
IYC (or + 2x UCC) against - 2x SCC (no regular inverse)
IYJ ( or + 2x UXI) against - 2x SIJ (no regular inverse)
ICF ( or + 2x URE) against =2x SRS (no regular inverse)
IGW ( or + 2x USD) against - 2x SSG (no regular inverse) ASSET I DON'T OWN
IYW (or + 2x ROM or RTG) against - 2x REW or RTW ( no regular inverse)
IDU (or + 2x UPW) against - 2x SDP ( no regular inverse) ASSET I DON'T OWN
IYG or KRE ( or + 2x UYG or UFL) against - 2x SKF or RFN) ( or -1x SEF)
IYE (or + 2x DIG or REA) against - 2x DUG or REC) (or - 1x DDG)
IYH (or + 2x RHM or RXL) against - 2x RXD or RHO
EFA against - 2x EFU ( or - 1x EFZ)
FXI against - 2x FXP (asset I do not own )
TLT against TBT (asset I do not own)
A few of the funds above I don't presently own but I found pairs that made sense.
Toofuzzy
Take the road less traveled. It will make all the difference.
