Leveraged ETFs use financial derivatives a sophisticated means of trading and debt like bonds to amplify the returns of an a variety of indexes. Since you have already chosen your best guess at the direction of the market, choosing a Bull ETF market going up or Bear ETF market going down will be easy. A 2X will try to double the return on its specified index and a 3X will try to triple its index. Of course, you will want to use 3X ETFs. The highest rated 3X ETFs are:. We would highly recommend that you specify criteria to your stock game so that Leveraged ETFs are not used.
He wants to hold a stock forever but will sell it when the fundamentals change dramatically and he is proven wrong. The returns can be fast and massive with volatile stocks, but they can also result in big losses. Besides choosing volatile stocks, you can also try triple-leveraged inverse ETFs to help you win the game.
These types of funds seek to deliver three times the opposite return of the target index in just a day. Therefore, the funds can be a major shot in the arm to your Stock Market Game portfolio if they move in the direction you want.
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Thus, a comparison of ROE of firms with the same debt level or from the same industry will only make sense. There are two ways that a company finances its capital requirements- either through debt or through equity.
A lower value shows that the company uses a lower amount of financing through debt and higher one shows that the company is borrowing more. And a higher level of borrowing indicates a greater chance for bankruptcy during tough times. A company with a debt-free tag normally looks attractive as this tag shows that the firm can manage its fund requirement through internally generated cash and they are cash-rich. It measures the profitability of a company and is expressed as a percentage. It shows how much percentage of profits a firm generated from its revenue, before paying interest and taxes.
Even Technical Analysis will help to pick value stocks. Analyzing the long-term track record of a company will help you to have a clear picture of the stability and ability of the company. The companies with strong long-term trends have always given good returns to investors in long run. Investment period Stock picking is just the start of the investment journey. Make a Diversified Portfolio This is the most important strategy for a big win.
Stocks, bonds and commodities are integral parts of a perfect diversified portfolio. Short-Selling Many people consider short-selling as a sin. Cut your losses quickly and make them smaller. The profit booking decisions can also be done depending upon the value of your portfolio. This will allow the remaining part to grow further.
Depending upon your risk tolerance, you should re-balance your portfolio. Avoid Market Tips and Recommendations There are many business channels and social networking sites that discuss multi-beggars, hot stocks, etc. They claim that these stocks can fetch higher returns in the short term. Most of the recommendations that are available on the TV channels and social media are biased. Even for financial news, believe only reliable sources.
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