How I lost $3700 and made $1500 with 3x leveraged ETFs

Long $UWTI

When I opened my DNB Trade account in 2015, my first trades were a bit crazy, among them:

  • $YHOO – Ā lost only 4%, but should not have touched it at all
  • $NBG – National Bank of Greece, lost only 25% (now delisted)
  • $CHAD, $CHAU – ETFs with 2x leverage that follow CSI 300 Index
  • $SUNE, $ZINC, $VRS – lost nearly 100%, delisted or went bankrupt

I tested my risk tolerance by starting with the most risky stuff I couldĀ find and when I got burned, moved to more safe things like sector ETFs with no leverage.

My most expensive lesson was from buyingĀ $UWTI – where I managed to lose about 80%, which amounted to more than $3700:

uwti Continue reading How I lost $3700 and made $1500 with 3x leveraged ETFs

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How to invest in stocks and outperform fund managers?

If we look at things very simply, there are 3 main options, how to invest in stock market:

1. Select stocks yourself

You can createĀ a stock portfolio of companies that you believe in and hope thatĀ these companies will grow and make you rich. But to get good results over the long-term, you will also need to spend lot of time learning about stock market.Ā If you don’t have time and will pick stocks without doing any research,Ā you risk gettingĀ burned.

For example – this is how GoPro stock chart looked like after IPOĀ – price shot up 300% from $30 to $90 in just 3 months. Imagine, how high it could go in 2 years?Ā Let’s say, you would have invested $990 and boughtĀ 11 GoPro shares in Oct 2014,Ā paying $90 for each share.

gopro_hype

Continue reading How to invest in stocks and outperform fund managers?

8 GIFs That Illustrate Investing

Time deposits

You make a money deposit to your bankĀ with condition thatĀ the money cannot be withdrawn for a certain period of time. Depending on the chosen term, bank will offer you different interest rates. For example – you deposit $1000 for 1 year, and get 1% interest. After the year has passed, you will have earned 1% of $1000 or $10.

$10 return is not much, but that is what you get forĀ a very safe investment – you know exactly how much you will get back before investing and unless your bank or government fails, your money should be safe. But before you do any time deposits, consider also the drawbacks:

1. Your money is frozen for the selected period of time and you cannot use it. In case you decide to withdraw it sooner, you will need to pay a penalty that will most likely be higher thanĀ the interest rate.

2. In most stable countries inflation is higher than interest rates from time deposits, so if the interest rate is 1% and inflation is 2%, then after 1 year you will have gained $10 from investment and lost $20 to inflation. In shortĀ – you freeze your money, let bank make profit from it and get back less that you had.

ice Continue reading 8 GIFs That Illustrate Investing