invest in a new Gold idea- DGP.

I love the leveraged ETFs. There are a number of ETFs that are leveraged to trade double and triple the moves of their underlying securities. These leveraged ETFs are far preferable to option contracts, which have a lot of negative associated costs and risks.

Options have a premium for time value, and the price erodes as the expiration time comes closer. Thanks to the volatility in the markets, the option premiums these days are huge. Simply going long the options is a very expensive proposition, and risky because they can expire worthless.

These new leveraged ETFs offer you more bang if you’re right, and greater losses if you’re wrong. However, they don’t have a time premium that erodes, so you can hold them much longer term without losing value simply because you’re getting closer to expiration. There is no expiration.

So, this past week I decided to see if there was a leveraged ETF for Gold, and sure enough, I found a 2 for 1. If you really believe Gold is headed to much higher levels and want to maximize your returns, DGP is the way to go. Double the move, with no time value or premium. Double the move up, and double the move down.

Here’s a chart with DGP over GLD. As you can see, when GLD goes down, DGP goes down more. When GLD goes up, DGP goes up more.

Gold made an awesome move this week, and actually traded briefly to $1,000 per ounce in Friday’s extreme fear driven market. Fear and momentum is driving investors out of equities and into the shiny stuff.

On Monday, I recommend selling EZA, and using the money to invest in DGP. Go from South Africa to Gold, and do it two for one. Since Gold has made such an impressive move of late, it might be a good idea to only invest half the money in DGP, and hold the remainder for a temporary pullback.

DGP is the one to own if you want to own Gold, and I believe everyone should right now for part of their portfolio. Today, Gold is being driven higher by the intense climate of fear. This is just the beginning. Later this year inflation will become the talk of Wall Street, and then watch gold get really rocking.

Buy DGP. $21.50 would be the ideal level to jump in, and Friday’s close was $23. Go small now, and pile in at that level. Price target longer term: $50.

Comments and questions are welcome.