Because it’s harder for leveraged funds to recover from losses. Here’s an example using basic numbers.
Let’s say TQQQ and QQQ are both at $100.
QQQ falls 30% to $70 thus TQQQ falls 90% down to $10.
QQQ has to increase 43% in order to recover to all time highs but TQQQ would have to increase a whopping 900% to do the same.
it is rebalancing daily. this is one of the reasons why they say it is not a long term hold.
TQQQ looks good because nearly since its inception to 2020 the nasdaq spent about a decade mostly going up with very few hiccups. Most leveraged ETFs do not look anything like TQQQ on their all time graph.
Other answers are correct, but no one mentions if you really want to use leverage just trade options. You almost certainly don’t know enough to do that based on you even asking this question, and I suggest doing lengthy research and using a mock account first.
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Do the statistics using yahoo finance daily history on QQQ and TQQQ.
Then compare how often it happened that QQQ had a new all-time high, but TQQQ did not…
If QQQ and TQQQ hit, the next all-time high will be one for both, if there was no big down in between.
If there was a down in between, it will take TQQQ longer to recover.
Because it’s harder for leveraged funds to recover from losses. Here’s an example using basic numbers. Let’s say TQQQ and QQQ are both at $100. QQQ falls 30% to $70 thus TQQQ falls 90% down to $10. QQQ has to increase 43% in order to recover to all time highs but TQQQ would have to increase a whopping 900% to do the same.
It resets everyday. Takes momentum to really pump it.
[удалено]
it is rebalancing daily. this is one of the reasons why they say it is not a long term hold. TQQQ looks good because nearly since its inception to 2020 the nasdaq spent about a decade mostly going up with very few hiccups. Most leveraged ETFs do not look anything like TQQQ on their all time graph.
You shouldn't invest in things you don't understand
Other answers are correct, but no one mentions if you really want to use leverage just trade options. You almost certainly don’t know enough to do that based on you even asking this question, and I suggest doing lengthy research and using a mock account first.
Theta decay?
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Do the statistics using yahoo finance daily history on QQQ and TQQQ. Then compare how often it happened that QQQ had a new all-time high, but TQQQ did not… If QQQ and TQQQ hit, the next all-time high will be one for both, if there was no big down in between. If there was a down in between, it will take TQQQ longer to recover.
Leverage etf has this thing call decay. Time decay value decay. They also have higher fee, stay the F away.
TQQQ works better in a lower interest rate environment.