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In Volatile Markets Like This 3X ETF’s Will Destroy Your Account So Avoid Them! – Mike Swanson (03/03/2020)

Stock market volatility is not gone yet, but as I said Saturday I fully expected the stock market to rally this week, not because I can predict the future, but because from a chart and VIX action perspective it was supposed to rally and it did start to do so yesterday. And this is not a 2008 stock market style crash no matter what some have been saying.

That said there is one thing you should avoid doing and that is you should not buy triple ETF’s, because they will destroy your account if you hold on to one of them as they all have decay factors that make them fade in value overtime. Big moves in markets make some people want to put on a trade, because they draw attention and generate huge emotions, but triple ETF’s come with them inherent flaws.

To give you an example, although I believe gold is a thing to own the triple ETF for gold stocks is down for the past six months and so is the triple short ETF for gold stocks!

Take a look at this chart of the popular triple short DUST ETF.

This DUST ETF is down in the past six months and is down over 75% over the past twelve months. That is not shocking as it is a 3X short ETF and gold stocks have gone up.

But look at JNUG! It is a triple long ETF and it is down too!

JNUG crashed over 50% last week and is now lower than its July low while the GDX gold stock ETF remains above that low and gold itself is only a few percentage points away from $1710.

This isn’t just a problem with these two 3X ETF’s, because all 3X ETF’s decay overtime. And the thing is this market volatility makes some people want to gamble things up with such crazy ETF’s. This is not the time for emotional plays, but for being more patient on the action.

Gold, silver, and mining stocks are a great place to put money to work and you can do it with me if you grab my Total Gold Trading Program, which specializes in single stock players and regular ETF’s and even includes with it an easy system to implement them with any account to LOWER volatility in the account and make the swings smaller and steadier. Just go here to do that:


As far as the coronavirus I posted a podcast yesterday on why it is time to end the panic over it even if we end up with more cases this week. To listen to it go here: