How to Double Your Profits Whether the Stock Market is Up or Down

In advanced investment world today, investors now have the opportunity to assess the performance of the major stock market indexes doubled by using the comprehensive index mutual fund offerings of two families of mutual funds, Rydex and Profunds.
By using this strategy, investors can increase their return on the same issue of investment dollars and thus accelerate growth. Their portfolio
The Rydex and Profunds Families offer what are commonly known as enhanced index funds. As ordinary mutual funds, enhanced index funds invest in different underlying shares and major indexes such as the NASDAQ 100, Dow Jones Industrials and S & P 500. But they also invest in derivatives such as futures and Equity Index Swap Agreements to their efficiency and ensure gains or losses equal 200% of the underlying index.
Enhanced index fund investing requires a new strategy that can significantly increase your efficiency when used with proper money management and a robust trading system.
Enhanced Index Funds Explained
The two categories Enhanced Index Funds are commonly known as "bull" funds and "bear" or "short funds." When buying a bull fund, the investor takes a bullish view that the market is going to rise. When buying a bear fund, the investor to believe that the market will decline because acquire funds bear in value as the underlying index declines a position.
Enhanced index funds allows the investor to increase because of their ability to return 200% of the underlying movement of the index. Profits in both up and down markets
Therefore, they offer additional exposure to an index with less investment capital, so you can free up resources for other investments. While they can provide accelerated gains, they also generate accelerated losses if the investor on the wrong side of the market.
Potential benefits of Enhanced Index Funds
- Double the profits of the underlying index in both up and down markets
- More exposure to the market without increased investment
- Can be used to short the market, which can not be done with most other short vehicles in qualified retirement accounts
Potential disadvantages of Enhanced Index Funds
- Leverage will maximize losses if invested on the wrong side of the market
- Increased volatility due to derivatives
- May not be suitable for all investors
- Lack of flexibility can not be traded during trading day, end of day pricing
- Tracking error; enhanced index funds can vary from underlying benchmark and therefore may not be delivered to the underlying index 200% efficiency
Enhanced Index Funds are suitable for you?
Enhanced index funds are suitable for investors who seek an aggressive investment tool and want the potential benefits of the underlying index surpass.
They offer investors a greater exposure and potential profits without extra cash and so allow the investor to maximize returns.
Before using enhanced index funds, using the investor must be honest or her ability to accept determine the volatility and risk but can improved wisely and in conjunction with a proven trading system, index funds a valuable and profitable addition to your portfolio be.
Copyright 2006 Equitrend, Inc.

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