I’m convinced that young investors should focus on leveraged index funds. There simply isn’t any question in my mind about it now. Take a look at this chart.

DDMvsDow.png

The chart above compares the Dow Industrials with DDM (Dow 30 leveraged). As you can see from the chart, when the Dow rallies, DDM spikes right with it and when the Dow drops, it drops significantly in a leveraged manner.

Now look at this chart:

2008_Half_Mini.png

This chart is from my mini account from which I decided to exclusively focus on DDM and selling covered calls slightly out of money. The difference in returns from the two is amazing. Selling calls helped cushion losses during downturn and provided phenomenal returns on the upswing. I plan on sticking with this plan on this particular account for the next decade so we’ll get to see what ten year returns look like but so far it’s looking good even in today’s horrible market.