(This is an excerpt from an article I originally published on Seeking Alpha on February 28, 2013. Click here to read the entire piece.)
In June, 2012, I compared the short-term and long-term performance of the Ranger Equity Bear ETF (HDGE) against ProShares UltraShort S&P500 (SDS). I concluded that SDS was OK for short-term bearish bets but HDGE was better for a sustained hedge over time. Surprisingly, since that time, HDGE and SDS are clocking the same woeful performance. They are down 28 and 31% respectively, while the S&P 500 (SPY) has gained 16% since then.
Source: FreeStockCharts.com
The attraction for using HDGE as a hedge is that it does not use leverage, so I find it disappointing that its performance has tracked that of the leveraged SDS. Even worse, during certain stretches, like most of the post-election period, SDS actually out-performs on BOTH the upside and the downside. {snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on February 28, 2013. Click here to read the entire piece.)
Full disclosure: long HDGE, SSO puts