The Fiscal Multiplier: How to Leverage Returns when Stimulus Arrives Efforts to stimulate the US economy through government fiscal policy have been a formal part of the political economy dating back to Franklin Delano Roosevelt's New Deal. An effective fiscal stimulus has a high 'bang for your buck' or 'fiscal multiplier', meaning that every dollar of stimulus can have higher multiple returns that bolster aggregate demand, thus lessening the recession's depth and length. Newly-elected President Joe Biden ran his campaign around the prospects of stimulus using his 'Build Back Better' plan as a cornerstone of policy. His first order of business is to push an enormous fiscal aid bill - in addition to the $900 billion dollar bill passed in December- through the Democratic-controlled Congress. Analysts expect this stimulus to be approximately $1.9 trillion in size and focus on areas hit hardest by the coronavirus. Details of the first stimulus are emerging as targeted payouts to individuals, extensions to unemployment insurance, healthcare improvements, small business funding, and airline support are all key areas expected to see a boost. Goldman Sachs raised its 2021 United States GDP forecast to 6.8% from 6.6% in anticipation of additional support. Raymond James Analyst Ed Mills anticipates the final passage of the bill to occur in early March. Just as interesting for market participants is Mr. Mills' comments that lawmakers commenced early discussions on a bipartisan infrastructure bill that would further boost economic performance. Understanding the details of the plan will be important for investors. Finding the right vehicles to allow you to create your own 'return multiplier' on investments will be crucial for the savvy investor. - Think consumers will benefit from the direct stimulus payment? Check out Direxion's 3x Retail and Daily Consumer Discretionary ETFs RETL and WANT.
- Will additional stimulus improve financial conditions and raise rates? Direxion has you covered via its 3x Financial and Regional Bank ETFs.
- Worried about the inflationary effects of fiscal stimulus? Take advantage of the higher prices in Energy and Oil & Gas or protect yourself with a 3x Bear Treasury ETF.
- Think stimulus is a sell-the-news event? Direxion has leveraged inverse ETFs across a broad range of categories that allow you to hedge your positions.
The well-prepared investor will be able to identify the opportunities and magnify their own exposure while properly managing risk. Direxion has well-managed vehicles to allow investors to achieve their goals. Perhaps more importantly, Direxion provides educational tools that help investors understand the instruments that they are using and define the risk associated with these ETFs. Given the volatility in markets, you may want the flexibility of Direxion ETFs to help tactically manage your portfolio in a risky environment. Investing in a Direxion Shares ETF may be more volatile than investing in broadly diversified funds. The use of leverage by a Fund increases the risk to the Fund. The Direxion Shares ETFs are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged, or daily inverse leveraged, investment results and intend to actively monitor and manage their investment. An investor should carefully consider a Fund's investment objective, risks, charges, and expenses before investing. A Fund's prospectus and summary prospectus contain this and other information about the Direxion Shares. To obtain a Fund's prospectus and summary prospectus call 866-476-7523 or visit our website at www.direxion.com. A Fund's prospectus and summary prospectus should be read carefully before investing. - Market Disruptions Resulting from COVID-19. The outbreak of COVID-19 has negatively affected the worldwide economy, individual countries, individual companies and the market in general. The future impact of COVID-19 is currently unknown, and it may exacerbate other risks that apply to the Fund.
- Direxion Shares Risks – An investment in the Fund involves risk, including the possible loss of principal. The Fund is non-diversified and includes risks associated with the Fund concentrating its investments in a particular industry, sector, or geographic region which can result in increased volatility. The use of derivatives such as futures contracts and swaps are subject to market risks that may cause their price to fluctuate over time. The Fund does not attempt to, and should not be expected to, provide returns which are three times the return of its underlying index for periods other than a single day. Risks of the Fund include Effects of Compounding and Market Volatility Risk, Leverage Risk, Market Risk, Market Disruption Risk, Aggressive Investment Techniques Risk, Counterparty Risk, Intra-Day Investment Risk, Daily Index Correlation/Tracking Risk, Other Investment Companies (including ETFs) Risk, and risks specific to the securities of the Retail Industry and Consumer Discretionary Sector. Retail and related industries can be significantly affected by the performance of the domestic and international economy, consumer confidence and spending, intense competition, changes in demographics, and changing consumer tastes and preferences. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.
- Distributor for Direxion Shares: Foreside Fund Services, LLC.
|
|
|
|
|
|
Disclaimer:
This email is a paid advertisement. It is for a product or service that is not offered, recommended or endorsed by Global Profit Systems, LLC and neither the company nor its affiliates bear responsibility or control over the content of the advertisement and the product or service offered.
Disclaimer: Futures, forex, stock, and options trading are not appropriate for all traders. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. This email was sent to edwardlorilla1986.paxforex@blogger.com by Global Profit Systems Intl LLC | |
|
|
|
|
No comments:
Post a Comment