Hai there is wonderfull ETF in the world is Ticker name is TQQQ its a nasdaq100 leveraged ETF
i am investing daily SIP in this ETF - this is big risk and big reward ETF - SMALL PORTION WE CAN ADD IN OUR PORTFOLIO
i am investing daily 10 dollar in this ETF - super volatility benefit in SIP we can get
if Any body INvest 10000 dollar in 9 yeras before - now its worth 1.2 million dollar imagine
Sounds exactly like a mutual fund advertisement.
long term passive investment + leverage seems like an extraordinarily foolish idea to me. When tough times come, capital will likely vanish no matter how much it goes up. How will they manage market crashes ??
@SpacemanSpiff you can do only SIP in this ETF - Lumpsum Not Advisable
any big crash you can get more units - more volatility more profit - this ETF will not go to 0
but every day SIP will reap a big benefit
Bosss this is not ads - real happended already
See the AUM 22 Billion
there is 1.2 million Dollar cost averaging (SIP) account is there from inception
ok, i did not read about it. But its not much better. In normal times, might be ok. But large crashes will still wipe out capital.
In an average bear market, investors can easily expect a drawdown in excess of 75% using 3x leverage. In a more severe bear market, the damage can be nearly impossible to come back from. Had the 3x leveraged Nasdaq 100 ETF been around in March 2000, it would have lost over 99.95% during the ensuing bear market that took the Nasdaq 100 down by more than 80% to its low in October 2002.
A 99.95% loss requires a gain of 200,000% just to break even. Needless to say, a 200,000% return doesn’t happen overnight. At an 8% annual return, it would take almost 100 years of compounding to hit 200,000%. That assumes a straight line, which is not the way markets work. If there’s another crippling bear market with high volatility in that 100-year period (a near certainty), this timeline could very well be extended for another century.
A visual of this concept may be more instructive. While after the 2000-02 bear market the Nasdaq 100 hit a new total return high in February 2015 (orange line in chart below), a hypothetical 3x leveraged exposure would still be 91% below its March 2000 high (blue line in chart below). The incredible rally since March 2009 is barely noticeable. That is the math behind of gains and losses, where the percentage gain required to make up for a loss increases exponentially as the loss approach 100%.
This is Index ownership Not single stock ownership
for example reliance is trading @ 2900 but its heavy price , i need to buy 1200 rupees - in this scenero you can buy at those price
But in leveraged ETF you can get oppourtunity lot of time in downside , i am really happy to buy on downside rater then up
its really for long term investment
every day 10 dollar really its willl work super SIP in this ETF
this is not 100 % in nasdaq 100 - there is a cushion for max drawdown also
i am putting my money in my overall portflio is 2 % only -
if i able to make a big amount of dollar then is 2% allocation is ok
yes, makes sense.
Good to know risk but there is potential reward too if good times continue.
Even with 2%, there probably should be some sort of exit plan, probably will need to book partial profits as getting out when down seems impossible here. Otherwise whats the point. Anyway, Good luck.
Someone might read your initial post and not have control over risk, so best to see both risk and reward.
Do you also have an FOF relating to this. I’m not a fan of ETFs. I’d like to see about the FOF.
how do u buy this etf. can resident indian buy this
QQQ tracks NASDAQ100 , TQQQ is more like a hedge fund with derivatives - much much higher risk . Right now NASDAQ 100 is running highs , so one will see all good with it. I couldn’t find any Indian MFs that track TQQQ.
Does this mean, we Indians cannot invest in this through our normal brokers?
you can invest from vested or stockal
This is not for long term investment. How can it be when a 33% drop in Index will wipe you out?
And if it seems to imply that this is a long term investment (for they allowed SIPs) - it is mis-selling. There was another index like that called XIV - Inverse of VIX by Credit Suisse and multiple ETFs were tracking it. It blew up 85% after market hours. And many billions were lost because it was not clear what the index was actually tracking or the full extent of its probable outcomes / risk scenarios.
I think the real use of TQQQ is in day / short term trading.
@TradeB2B - Thanks for sharing it though. The free markets of US are always full of Ideas.
@TradeB2B how do you invest in this? Is it legal to invest fron India? Whenever there is swaps & futures involved in a any stock, people say its a gray area. It’d be great if someone can explain this
its legal , you can open account directly with TD ameritrade , and then you can invest
Leveraged ETF are very high risky products its needs some market timing my suggestion not to invest day by day invest when markets needs timing(consolidation,results,qudrapile etc)
And want to know that ameritrade accept indians to open account and invest in us stocks i get to know that they wont accept and no option to invest in fractional shares.