ETFs: 10 Most Dangerous (Part I)
RXD's average daily trading volume is fewer than 8,000 shares, making this fund dangerously illiquid. While all leveraged funds are risky, RXD's double risk factor makes this fund one to avoid.
The much anticipated VXZ and VXX offer investors exposure to volatility plays. These ETFs track market volatility through the use of derivatives, and their complex strategies make them appropriate for only the most sophisticated investors.Recent market fluctuations have made the topic of increased volatility a popular theme, and these products could be helpful in hedging a large, multilayered strategy. Average investors, however, should stay away from betting on volatility. Making a bet on volatility by itself is like sitting at a craps table and picking red or black. -- Written by Don Dion in Williamstown, Mass.
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