re: Stocks on your watch list

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The JNUG ETF is designed to provide 2x-levered exposure to the Market Vectors Junior Gold Miners Index. In other words, it provides leveraged exposure to gold mining stocks, which should perform much better when gold prices rise. Unfortunately, the biggest problem with funds like the JNUG is contango.

Since these types of leveraged funds are constantly rolling over their futures contracts, they are constantly losing value. Forward-month contracts are almost always more expensive than current-month contracts. In other words, JNUG is constantly selling lower-priced expiring contracts and buying higher-priced futures contracts to replace them.

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The JNUG ETF is designed for day trading, which is essentially gambling unless you are a professional. Buying and holding the JNUG ETF for more than a few days at a time is essentially flushing money down the toilet.

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