Buying options on the S&P 500 is like car insurance for your investments. The vast majority of the time the person selling you the options (the insurer) will be the one reaping a net profit. XIV allows you to have the benefit and risk of being an the insurer.

I maintain three strategies on Collective2. My "Small Stock Portfolio" holds company stocks that I expect to outperform based on technical and fundamental analysis, and "Simple Volatility" trades XIV, gold, and holds cash depending on two proprietary signals. My third strategy "Stock and Volatility" holds a blend of the first two strategies and is the one I would recommend to a friend because its asset allocation gives more protection - though it does reduce overall returns.

Any of my strategies could easily experience a draw down of 50% or more and should be used with caution.
All my strategies follow what I do in several of my accounts at Interactive Brokers. All three of these strategies are led by IRA accounts. So, I do not open positions that require margin or that would make it possible for me to lose more money than I put in to the account. I do my best to make sure the money in these accounts matches the dollar amount in the simulated Collective2 account but any use of margin shown on Collective2 will actually just be a discrepancy between the simulated and actual account balance.