No. of Recommendations: 3
If those indexes fall 10% you gain 30%. Fall 20% you gain 60%. Fall 30% you gain 90%.
I don't think those funds work this way. They work more like the following -
* You buy the fund, let's say $1000
* A month goes by, no big drop, no big gain, now you have $970 in the fund
* Another month goes by, same, now you have $941 in the fund
* Another month goes by, market up 4.5%, now you have $900 in the fund
* Ten months go by, market up 9%, now you have $630 in the fund
* Next month, market drops by 5%, now you have $700
* Next month, market drops another 5%, now you have $800 in the fund
Etc.
