What does it say of equities that inverse ETFs have become good long-term bets? Flawed construction aside, Theo Casey notes short EURO STOXX funds gained steadily in 2011. Here he shares a short selling candidate for the year ahead.
Funds aren’t constructed with the aim of losing
One could make an argument that volatility ETFs are an
exception to that rule, but that’s a discussion
for another day. Fortunately that infamous Dutch invention -
short selling - allows us to make money from the downside of
any stock or fund.
The golden rule to short selling is a simple one: be
Short positions can be dangerous and costly to maintain
overnight, so tend not to make good buy-and-holds. Inverse ETFs
rarely post positive multi-day returns as slippage occurs
between holding periods and leads to a costly compounding
This article is available to subscribers and registered users
Please log in to continue reading.
Not yet registered? Take a free trial.
If you have already taken a free trial you
have ongoing access to the analysis section of FOW.com including this story.
Log in using your details below to read.
Already have an account? |