Leveraged ETFs Are Not Long-Term Holdings. Here's Why.
Imagine you're at a casino, and someone offers you a deal: every time the roulette wheel lands on black, you win double. Sounds amazing, right? But there's a catch. Every time the ball lands on red, you lose double too.
That's basically a leveraged exchange-traded fund (ETF) in a nutshell.
Leveraged ETFs tend to be volatile assets, and their prices reset daily. This cycle creates a mathematical effect called "volatility decay," which sounds boring but is actually a silent killer of your returns.
Source Fool.com
