Submitted by Tyler Durden on 03/26/2012 - 09:22 Exchange Traded Fund Reality Volatility
According to Barron's as much as 91% of “triple” ETF’s might be owned by individual investors. That figure seems shocking, and as the article admits, could be wrong, but it is scary. The activity in TVIX the past few weeks does indicate a strong retail presence – we would like to think professionals didn’t bid something up to an 80% premium to NAV, knowing that the share creation process could be re-instated, virtually assuring that the premium would collapse to 0. We don’t see a need for these products except for small retail investors who can’t get leverage any other way, and we suspect they don’t understand how these things really work, as they are the most likely to buy and hold these things.
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http://www.zerohedge.com/news/leveraged-etfs-why-do-we-have-them
Waaay back when, I read the prospectus for FAS FAZ, it basically says, these are trading instruments, not investments... I hope folks have read and understand what they say!!
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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