[module0000]

No: ETF decay is real and always has been. You're better off shorting an inverse ETF than buying and holding SPX.

edit: and shorting an inverse ETF has it's own problems, mainly what happens to your position if the market crashes - but that problem exists in any strategy.

[nickles]

> ETF decay is real and always has been. You're better off shorting an inverse ETF than buying and holding SPX.

This is bad advice.

Entering a short position requires paying interest on the borrowed shares, which may consume any decay you're collecting.

Short positions cap returns at 100% and have the potential for unbounded losses. Long SPY (S&P 500 ETF) produced returns of 280% since Feb 2009. Short SH (Inverse S&P 500 ETF) yielded 84% over the same period. In order to generate similar returns, you'd have to increase your position size periodically.

The long position also has the advantage of providing collateral, whereas the short position consumes margin.

[projektfu]

You're going to have to explain that better. First of all, I don't think you can buy the actual index (SPX) but you could buy a future on it. Do you mean SPY? VOO? Second, I haven't heard of decay of unleveraged ETFs. And even for leveraged ETFs it's at least controversial to say it's a real phenomenon. Third, in what way does borrowing to short the index help you, given that you have to pay for the privilege anyway?