[Bilderberg]

I hope I can draw enough talk with this post because I'm kinda confused as to what I should do and would tremendously appreciate some advice... Please read:

With some cash I held in my RRSP, I decided to jump into the market to take advantage of the "cheap" prices of some stock I'd been craving for a while.

In particular, I couldn't resist seeing AAPL (Apple Inc.) lose ground and fall in price, and so I first bought 18 shares on May 5th at $254.96. When I saw it dropping even further to the original price of my craving I bought 22 shares at $245.30 on May 6th... for a current total of 40 AAPL shares at a book value of $9,985.88 USD.

Yesterday AAPL stock traded well around $235.

With all the euphoria of May 6th, and after having made a small profit holding the ultra-bearish TZA stock, which returns 300% of the inverse (or opposite) of the price performance of the Russell 2000 Index (the Small Cap Index), I felt overly bullish that the market was going to make some, at least some sort of recovery on Friday. So I put $4,200 CAD into the ultra-bullish TNA (the opposite twin brother of TZA, and thus triples the price performace of the Small Cap Index) and bought it at the ridiculous price of $51.99 USD early in the morning...

The rest is history: the markets continued to slide and TNA closed 8.69% down to $47.60. I made me hold the stock out of nonsense during and after the day, supposedly not to realize the loss...

I am not worried about holding 10K of AAPL, but rather about how deviated my perception might be that I am still holding this 80 shares of TNA... I could be buying even more AAPL at the sweet price of $235.

My rationale is that the market is going to come up, and my TNA will rise at triple speed. But while it goes down at triple speed, I am effectively locking my money, in view that selling it off would make me realize proportionally huge losses.

But right now the losses are not that huge, merely -$351.20... I could pull out and simply buy more AAPL with that money... Or should I hold it?!?!

I appreciate any opinions...

 

[mogul777]

First why would you buy Apple near its high? Second why would you buy one of those garbage ETFs when you don't know what you're doing?

Sell the ETF if you can't sleep at night or actually believe the correction will continue for a while. Hold if you think the market will rebound in the near future. Keep in mind you won't make a profit unless the market maintains a trend in your favour...

You could probably just hold Apple, but I doubt I'd throw anymore money into it at this price.

 

[dogcom]

Buying these ETF's is for traders and if it doesn't go your way you dump it. They are not buy and hold and are meant for fast money.

 

[agladders]

Ever try to catch a falling knife - how about 3?

There's a reason many people call the 3x "widow makers". I'm sure you've already done the research, but they're meant to be intraday trading items. Some people hold them longer, days to weeks. I'm sure you've already done this, but if not do some googling on how they work (note the -0.5% daily reset) and some people have come up with varying strategies on shorting them.

Over a period of 3 weeks in early 2009 I lost a ton of money holding on to the wrong 3x ETF - I was sure we were going to get a bounce and as we know, we didn't until I'd blown out a good chunk of change in that trading account. Who knows what is going to happen on this one, everyone has their theories. It's a lot easier to long-term hold something like AAPL to rebound, which you basically can't do with a 3x.

I don't use the 3x ones anymore (preferring ES/NQ) but if I was using them I'd only be in intraday going with the trend or at high probability setups with appropriate stops. If I knew it was going to be a few days, I would short the opposite ETF to the anticipated market direction eg short the bear if it looked like an uptrend, and hedge overnight.

Begin disclaimer - but that's me, you need to do what you are comfortable with and with the risk level you want to take and presumably with money you don't mind losing. I was nicely short coming into this downtrend, I'm now net long with a hedge to soften further declines.

 

[1stmilliondollar]

Just to share my experience using leveraged ETF. I learned the "flaw" of this product the hard way.

When leveraged ETF was pretty new (peak of bull market), I bought a couple of them; mostly the ones from Horizons Beta Pro. I was thinking that I can beat the market very easily.

Then we had market crash in 2008. That's when I learned that this product is not meant for investment. It is just for day trading because it amplifies the underlying index on a daily basis.

I was still very lucky because I switched all my leveraged ETFs to a non-leveraged ones. For example, I switched HEU with XEG. Had I not made this decision, my loss would be -63% (instead of -22%). If we count dividend from XEG as well, then my loss would be less than -20% by now.

Personally, I agree with everybody else about AAPL though. In fact, I am also keeping an eye on this stock to buy some.

 

[Toronto.gal]

Apple closed at $235+ on Friday, but I managed to add at under $230 & considering the 52 week high was at $272+, I thought it was not such a bad deal. Do you think the stock will lose much more following Nokia's multiple lawsuits?.

 

[celishave]

I think in general buying any stock at it's all time high is a bad idea. I thought Apple was overvalued at $225 - priced to perfection. It will be harder and harder for them to come up with the next big thing.

As for these 2X, 3X products - my understanding of them is that you must not hold them for more than a few days due to re balancing and the fees therein. So then the question is, how can anyone reasonably predict the direction of the market, oil, gas, etc for one day? This is gambling pure and simple.

 

[Cal]

If you are stressing over it sell.

Regardless of whether someone post that they feel markets will rise or fall.