General Stock Ideas

[bigworld]

gfp: What you propose could be a successful strategy if the market cooperates. Many times it doesn't. While I am very confident that we'll get a strong rally in the First Quarter some black swan event could throw a monkey wrench into that scenario. The problem with the leveraged funds is slippage. With SSO if there is a slight market pullback or even a flat period the fund loses money. I would suppose shorting SDS is a better proposition. You'd make money in a flat or rising market. But if you utilize your strategy I would sell or cover when the S&P approaches its previous intermediate high at 1370. The market could go to 1400 briefly, but t won"t last long. By using high beta but non leveraged investments like GDXJ, SLX and XME I won't usually lose money in a flat market and I will gain about 20-40% more then buying an index like the SPY. I've been disappointed in the past when I've bought leveraged funds. Even when the move I anticipated eventually occurs, if there is a time delay I have seldom made much money in them. Your timing has to be impeccable, and that's difficult for even the best investors. So of the two methods I suppose shorting SDS would be the best course. Let me know how it works out. And have a great New Year.