Investing for Beginners .EU, investing

investingforbeginners.eu Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.
Benjamin Graham

Investment in Ultra Short ETF

 

Investment in Ultra Short ETFs combines characteristics of both: Ultra ETF’s and Short ETF’s. The value of Ultra Short ETF changes twice in opposite direction to the value of index which is followed by the ETF. For example, if index daily return would be 1.6%, then Ultra Short ETF should have -3.2% daily return. Still it doesn’t mean that if index will fall 10% in one month that will have a positive return of 20% from Short ETF. In such case your return would be lower, but how much would depend on volatility of the market during the period. 

 

Ultra Short ETFs and Short ETFs should be used only if believed that market (index of the ETF) will fall down in the future or for hedging.

 

 



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