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General Stock Investment Strategies/How do leveraged ETFs find yearly returns


If leveraged Etfs returns are supposed to be daily and variable how do they find 3 and 5 year returns. And if they can get such returns over long periods of times like 3 years where's the risk in holding it longer than a day.


Dan, I'm sorry but this is far away from things that I feel comfortable answering. Maybe there is someone else @ AllExperts that can answer this or you may have to ask someone else somewhere else. A thought that I have, not sure if it will help, is try going to an online brokerage office site and ask someone in there. Chances are they will not try to get you to set up an account since that is mostly done online. You can just drop by to get information. Here's a link to a branch locator for Scottrade.

I'm sorry I could not be of more help to you.

On second thought I will assume I know something and so here is a partial answer to what you might want to know. ETF's are Electronically Traded Funds. I don't deal in them but my assumption is that you can get in and out of them in a days time, possibly shorter. Funds seem to me to be always variable, otherwise there would not be much of a market to trade in them. The reason people trade in something is for the benefit/risk or risk/reward trade off. Any time you hold something for longer than a day your risks start changing, either more risk or less risk. If you are holding some stock fund in the oil & gas industries now your risk is getting greater due to the falling prices. If you were holding a stock fund in the airline industry your risk over the near term past has been less due to your principle investment is growing dramatically and there is less risk of losing money. So it does not matter what your investment is, the risk will always be there and changing.

Don't ever think that the past performance of an ETF is going to be duplicated over the next year or two or three. It likely won't happen. If you go into an investment with that mindset you are likely to lose money due to being complacent in watching your investment. Better to plan for the worst and hope for the best.

The part about the "leverage" is not something I know about except that it sounds like you could gain or lose a lot more than you have invested. I don't leverage my investments in any way. What I put in is what I'm willing to risk. I am pretty sure that I can get out of the investment without losing more than I invested. With a leveraged ETF I'm not sure that would be the case. You might owe more money in a losing trade than you had invested.

I hope this gives you something to work with. Sorry I could not be of more help. If I'm as clear as mud, just write me back and I'll try to do a better job of what I'm not communicating.

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I can answer general questions about stock investing. I am not a trader and do not have much ability to answer questions on trading. I am a long term investor, so those questions are fair game.


I have been a private investor for decades. I have been specializing more in stocks since around 2000. I publish my own newsletter for long term investors. My website is

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