Racket wrote:
Maserati wrote:
Things going well for me, 3M has no effect. Most industrials aren’t appealing to me at the moment.
...seattle, those 3x ETFs aren't meant to be held for long than a couple of days. The 3x leverage only plays out f you get an exact linear growth of the underlying. The daily re-balancing will knock out gains otherwise. Plus they tend to have maintenance fees
Racket, thank you for taking the time to give me some advice.
But while i have heard this a lot - it is the conventional wisdom that the daily re-balancing will mitigate gains, i just have not found that to be the case most of the time, and even when it is true, it doesn't mitigate by much.
I have done really well holding TNA for many years. The proof is the unrealized gains column that shows big run-ups.
Let me offer to you that daily re-balancing does draw a few percent off of what might be an otherwise triple mutiple of a long term gain of the straight unleveraged index, but a few percent over a long time is still small relative to the outsized tripled gains.
Just for a double check, i ran the numbers for the S&P 500 and for the Nasdaq, both for the straight index and for the 3x leveraged ETF tracking that index for the YTD.
Russel 2000 Small cap: +16.7 %
TNA (3x leveraged Russel 2000): +56 %
QQQ (Nasdaq 100) index: 22.4 %
TQQQ (triple leveraged Nasdaq 100): 80.9 %
As for the fees, they group right around 1% annual. Do you know how many people in the workforce pay fees that large or larger every day on the mutual funds in their retirement accounts? And remember, the leveraging is essentially borrowed money, and alternatively, the interest you would pay on a brokerage account to trade on margin is many times more expensive than that. Ultimately, the 1 % fee has to be figured into one's gains to make sure one is still making enough off the trade to justify it.
Again, thanks for taking interest. But trust me when i tell you that i have done this since the triple leveraged ETFs came out and it has returned handsomely.
That said, I am planning on cashing out very shortly in that I've reached the fortunate point where i don't need the risk anymore and further upside really is not going to change anything for me and mine.
Nice talkin' to you.