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Should I invest in the etf "DUG"?

Mutual Funds, Hedge Funds and ETFs

Should I invest in the etf "DUG"?

Postby kerwin » Wed Apr 17, 2013 3:29 pm

The ETF "DUG" is an inverse etf to the price of oil. As oil has been going up, this etf's NAV has been plummeting. It's at an all time low. Would now be a good time to invest in it, or should I wait as the price of oil still may go higher?
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Should I invest in the etf "DUG"?

Postby adofo » Wed Apr 17, 2013 4:40 pm

Oil and gas are both potentially bullish, plus we may see Isreal strik Iran this month, which will cause a spike in oil prices.

One thing you need to be careful about with DIG and DUG, is to remember that they're ultra ETFs, so in the longer term, which ever direction oil and gas go, both of these ETFs go down.


Since Feburary 2007, DUG is down around 80%. and DIG is down around 50%. So either way you invested you would have lost tremendous money. This is due to the deterioration of leveraged ETFs. So you can't look at all time lows as something significant, because eventually both the bull and bear ETF will reach zero.

Normally before they hit zero, the company will do a reverse split to knock the price back up. This is why so many remain confused about the leveraged ETFs.

They're good for day trading, or swing trading if their moving steadiliy in the right direction, but otherwise should be avoided. And again, you can't really do technical analysis with them, because of the deterioration.
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Should I invest in the etf "DUG"?

Postby aviya63 » Wed Apr 17, 2013 4:46 pm

Oil just broke out and is heading higher. Why would you go the opposite direction now?
I would stay away.
Check out BGZ instead. It's triple leveraged short large caps. When the market craters this puppy will fly;-)
Check out GDX too. That's the gold miners index.
If you want to play the metals themselves then check out GLD (gold) and SLV (silver)
I like BGZ best now though. This market is a house of cards and is sooooo overdue for a correction it's not even funny!
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Should I invest in the etf "DUG"?

Postby theodorus80 » Wed Apr 17, 2013 5:07 pm

Would not wanna short oil just yet, oil has some bullish indicators for now.
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Should I invest in the etf "DUG"?

Postby byrtel » Wed Apr 17, 2013 5:30 pm

Looks very attractive, but the trend is bullish. Choose DIG instead.
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