Why You Shouldn’t “Invest” In 3X ETFs: Exhibit “B”

On Friday, people are buying the “Brazil just proved their political crisis is intractable” dip.

Fresh off an exceptionally harrowing session that tripped circuit breakers and threatened to plunge the entire EM complex into chaos, the Ibovespa jumped nearly 3% as investors went “bargain” hunting in Latin America’s largest economy.

As noted earlier, Michel Temer insists that what you thought you heard on those tapes isn’t what you actually heard and apparently that’s good enough for traders.

Still, it likely won’t do much to lift the spirits of anyone who was stupid enough to buy shares of Direxion Daily Brazil Bull 3x Shares ETF, ticker “BRZU,” because while it’s staged a nice comeback Friday, yesterday it crashed a truly impressive 48%:






And that right there is why you should not “invest” in levered ETFs.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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