How Reliable Is UYG Longterm?

[aquaswim47]

No, my line of reasoning was that the UYG ETF failed in its strategy meaning that 2x the gain doesn't result in 2x the gain for the ETF. SKF is what you want to buy if you want to be short but just because the market loses money, doesn't mean that you will make money in the SKF (just look at FXP). I think you just stick with one time leverage and stay away from futures because you don't know if they are going to act in the same manner. At least by shorting stocks or buying put contracts, you know what you're getting.

For instance, if you were going to buy gold, it would be like buying puts on silver or platinum. The gold might not move in the same direction as silver or platinum. In my opinion, I would stay away from these investments unless your holding period is under 1 week to 1 month.

Moreover if stocks of financial companies are down 70-95%, that is not a bubble situation. I've been trading in and out of the financial stocks. I was happy to have traded out of USB by last Friday.

Originally Posted by WallStRaider

In short,UYG is an ETF that gains in value when financial stocks lose value. Do you really think financial stocks will be down... forever? They may be down for 2, 3, 5 or even 10 years, but in the long run, enough of them will recover. Unless they don't even survive the downturn and are nationalized.
Most long term investments are made with the view that an investment will gain in value.If it's a stock, you assume that the company will improve its products and make more money and your value as a shareholder is increased. I'm not sure if making a long term investment with the view that the financial industry is going to go kaput is a good idea.
And finally, the Bank index has fallen over 70%. Even if you are still bearish on the financials(and there does to seem to be a lot of reasons to be bearish) is it a good idea to essentially take a short position now?
Just my two cents.

[Stocktrading101]

I find UYG very interesting for the same reasons depicted earlier in this thread. The ETF has lost whatever 95%+ of its value, so what now?

Lets say hypothetically that the financial return to half of what they were previously, will be the UYG run back to the $30s and see a couple thousand percent return? I doubt it.

[aquaswim47]

Originally Posted by Stocktrading101

I find UYG very interesting for the same reasons depicted earlier in this thread. The ETF has lost whatever 95%+ of its value, so what now?

Lets say hypothetically that the financial return to half of what they were previously, will be the UYG run back to the $30s and see a couple thousand percent return? I doubt it.

. I just don't see the attractiveness of these investments; do the math, please, before investing in these. They're hurting the entire market just so that investors can salivate over returns that won't exist. Bring back the uptick rule and short-selling that can actually be profitable. We will all be better off.

YTD, the XLF is down about 3.4% whereas UYG is down 35.86%. Trying to overcome those down-drafts make no sense. Stick to simplicity. In this market, simplicity works and is the way to prosper, long-term.

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[Pearlpam]

Reliable is UYG long term Secure Runway Systems Corporation is considered to operate in the Industrial Goods sector. They specifically operate in the Aerospace - Defense- Products/Services business segment contained within the Aerospace/Defense industry. A development stage company planning to enter into the airline safety industry with a cost-effective runway monitoring system that could be used to alert ground, tower and/or flight crew of the presence of Foreign Object Debris.