There are basically two options that you can use to buy into the market using the Boring Bull Model. The first option is to simply buy any S&P 500 Index fund. Seemingly, there is an infinite number of options from the variety of mutual fund companies; so pick your favorite. The second option is to buy into a leveraged ETF based on the S&P 500 index.
S&P 500 Index Fund
The S&P 500 is a stock market index that tracks the stocks of 500 large-cap U.S. companies. It represents the stock market's performance by reporting the risks and returns of the biggest companies. Investors use it as the benchmark of the overall market, to which all other investments are compared. Just about every mutual fund will have a S&P 500 index fund.
Advantages and Disadvantages
- Easy to buy and sell with your existing accounts.
- Less risk than a leveraged ETF.
- Limits your growth potential
The Direxion Daily S&P 500 Bull (SPXL) and Bear (SPXS) 3X Shares seeks daily investment results, before fees and expenses, of 300%, or 300% of the inverse (or opposite), of the performance of the S&P 500 Index. There is no guarantee the funds will meet their stated investment objectives. Leveraged and inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments.
- You will need a Brokerage Account.
- Higher risk versus a standard mutual fund.
- Higher rewards when the cards fall into your favor; which they do 84% of the time.
- All model returns are based on the SPXL ETF.
All written content on this site is for information purposes only. Opinions expressed herein are solely those of the author. All information and ideas should be discussed in detail with your individual advisor prior to implementation. The information contained on this Website and the resources available for download through this website is not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be, and the information contained on this Website is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.