Tuesday, December 16, 2008

Could this be it for interest rates for a long time?

An exciting session ended on the upside today in the American stock markets after the Federal Reserve announced that it is lowering interest rates to the range of 0% to 0.25%. What's next, negative interest rates?

Dow -------- 8,924.14-----+359.61 ----- 4.20%
S&P 500 ------ 913.18 ------ +44.61 ---- 5.14%
Nasdaq -----1,589.89 ----- +81.55----- 5.41%

All of these real estate ETFs rose impressively today:

RWR +13.34% DJ Wilshire REIT ETF. RWR (NYSE ARCA) $40.19 Change:+4.73
ICF +10.66% iShares Cohen & Steers Realty Maj. (ETF) (NYSE) 43.92 +4.23
VNQ +10.21% Vanguard REIT ETF (NYSE) 36.28 +3.36
IYR +12.18% iShares Dow Jones US Real Estate (ETF) (NYSE) 37.58 +4.08

Some Direxion funds are up incredibly since Dec 12, 2008:
1. DXHLX +1600%
2. DXQLX +700%
3. DXDLX +500%
4. DXZLX +500%
5. DXSLX +450%

The first, at least, is rumored to be a "reverse split". These Direxion funds aren't "buy and hold" funds. There is a "buyer beware" article from Morningstar warning against these funds here:
http://news.morningstar.com/articlenet/article.aspx?id=264847

But with all these spectacular gains today, investors begin to make up for previous cliff-drops.



In a comment dated Thursday, December 25, 2008 1:53:00 PM EST, here is what a commenter adds about Direxion Funds, with my gratitude:

Anonymous said...

Please be aware that eight (8) Direxion Funds will be undergoing a reverse split the weekend of December 12, 2008. The ratios are shown below.

December 12, 2008, will be the last date of the pre-“reverse split” price and December 15, 2008, will be the first day reporting the post-“reverse split” price. Share balances will be adjusted downward at the same ratio the NAV
is increased.

Here is the table of ratios:
FUND TICKER CUSIP SHARE RATIO*
Small Cap Bull 2.5x Fund DXRLX 254939838 1:2
Developed Markets Bull 2x Fund DXDLX 254939614 1:5
Emerging Markets Bull 2x Fund DXELX 254939630 1:5
S&P 500 Bull 2.5x Fund DXSLX 254939705 1:5
NASDAQ-100 Bull 2.5x Fund DXQLX 254939200 1:7
Latin America Bull 2x Fund DXZLX 254939507 1:5
China Bull 2x Fund DXHLX 254939515 1:12
Commodity Bull 2x Fund DXCLX 254939655 1:3

*The ratio of 1:x means that you will get 1 (one) post-“reverse split” share for x pre-“reverse split” shares. The NAV will go up by the same ratio.

EXAMPLE:
At the close of business on December 12, 2008, you own 15,000.000 shares of the Direxion Latin America Bull 2x Fund at an NAV of $4.30 per share. Your
account’s total Net Asset Value is $64,500.00.

At the open of business on December 15, 2008, you will own 3,000.000
shares of the same fund at an NAV of $21.50 per share. Your account’s total Net Asset Value will be $64,500.00.

If you have any questions, please contact us at 800-851-0511 between the hours of 9 AM and 6 PM Eastern Time, Monday through Friday.

No comments:

Post a Comment