Bruce Bond, president of PowerShares, says the savings rate, which is up as retail investors become cautious, could hinder the economy. Investors need to take advantage of different opportunities and they can’t rely on the set-it-and-forget-it strategy. ETFs could come out strong because of the lure of transparency, low costs, liquidity and new tax implications. Not to mention hedge fund strategies or tactical long/short strategies and commodity-focused ETFs that are now available to retail investors.
Leveraged ETFs
Dan O’Neill, President/Chief Investment Officer at Direxion Funds, says the success of Direxion is because its leveraged funds allow investors access to an “athletic set of tools.” But a potential trader should monitor these type of funds very frequently and be educated about the ramifications of using these types of leveraged funds. O’Neill stresses that they are not meant for everyone.
Thoughts on John Bogle
The webinar addressed the words of dissent about ETFs, particularly from John Bogle, who recently did a study showing that investors generally make poor decisions when buying and selling them. O’Neill notes that Bogle’s study didn’t account for investors who were shorting or hedging, and that he knows many people are actually using ETFs very constructively.
Max Chen contributed to this article.