Daily Investment Interpretations

April 16, 2009

2009-4-16:   The market indices rose again today, with all three indices hitting new highs (since the March lows). The NASDAQ gained 43.64 points (2.68%) to end the day at 1,670; the Dow garnered 95.81 points (1.19%) to close at 8,125; and the S&P 500 gained 13.24 points (1.55%)  to 865. Oil remained essentially unchanged at $49.83 while gold lost $13.70 to finish at $879.80, respectively. The VIX fell 0.38 to 35.79.
     I promised yesterday to write more about investing strategies this morning. I spent all morning working on investment strategies, but I couldn't finish the job. (It involves calculations and telephone calls.)
    I had counted on riding the Proshares Ultra Emerging Markets Fund back up. A call to Proshares and a review of the Fund's online prospectus indicated that it would be expected to overshoot on the upside in a rising market the way it overshot on the downside in a falling market. That may yet happen, but right now, neither the Proshares Ultra Emerging Markets Fund (UUPIX) nor the two Chinese Ultra (2X) funds,.UGPIX and DXLHX, are delivering twice the gains of their underlying indices, much less overshooting them. Consequently, I'm going to recommend the use of margin for taxable accounts and an option strategy for tax-advantaged accounts such as IRA's and 401k's. What's at issue is the tradeoff between risk and reward. It will take a little more time.