Recently, I have noticed that many ETFs are oversold. Panic engulfs the market now. Investors are fleeing, traders are shorting, CNBC’s sentiment has become so bearish. It is times like this that smart investors pick up stocks at a steep discount.
To take advantage of this new bottom, it is wise to pick up some leveraged ETFs. The reason is simple, we are uncertain whether this market will continue southwards, hence we want to have some cash holdings. However, we also do not want to lose out in a probable market rally to 10500 or 10800. This is why leveraged ETF is so attractive.
We can divide our money into 3s, and purchase 1/3 of our money in these 3X ETF – FAS, DZK, SOXL
Should the market drop more, we enter another 1/3 of our money in them, and so forth.
FAS
SOXL (possible 20% gain trade)
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