am wrote:If you had to put 1K in a fund for 60 years to maximize potential returns, what would it be? This does not have to be Vanguard.
UYG, it's a no-brainer.
UYG is the ProShares Ultra Financials ETF, which "seeks daily investment results, before fees and expenses, that correspond to two times (2x) the daily performance of the Dow Jones U.S. Financials Index." They note that ETF seeks that return "for a single day
." That boldface is theirs, not mine!
It's a "no-brainer" to leave money for sixty years in a fund whose fund company says "investors should monitor their holdings consistent with their strategies, as frequently as daily?"
It's a "no-brainer" to leave money for sixty years in a leveraged ETF when there's a FINRA alert
entitled "Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors?
If you'd put $10,000 into UYG at inception, you'd have $1,081 today. Your money would literally have been decimated. Meanwhile, if you'd put it into a straight financial-sector fund, you'd still have well over half of it, $5,931.
In a daily-leveraged ETF, compared to a straight, unleveraged fund, the gains made during periods when the asset values are rising do not make up for the losses during the periods when they are falling. Perhaps the best way to see this is to pick a starting and ending point at which the straight fund had almost the same value. The "straight" mutual fund investor was almost exactly back to even. The leveraged ETF investor was down over 60%.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.