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An interesting topic for me and I hope for you is which path to follow for maximum outperformance ?
Individual shares when we have a strong robot buy/sell signal or TZA/TNA/GDX ?
In my particular case I am doing so well with the 3X ETF's I cannot find any reason to invest in individual shares.
I would be very interested in your opinions. :O)
Trev
Trev,
At market bottoms - such as the one we just had - individual stocks may experience a higher level of vol as each seeks its own bottom. If you are using trailing stops on these stocks, I've seen where they are hit even though the market indices, while bumping around, remain above their respective stops, using the same stop methodology. This leads to potential whipsaws and the frustrating situation where you are right on the market call but now are in cash and having to make the emotionally difficult decision to get back in as the market moves strongly upwards.
The inherent diversity of an indice reduces the volatility of the individual stocks contained therein.