I understand the conventional wisdom is levered ETF/Ns are not buy and hold investments because they aim for 2 or 3x returns on any given day and rebalance, and that after daily rebalancing losses can compound greatly over a short period resulting in loss of most capital.
But longterm returns are below even after these funds have lost half their value in recent weeks:
TECL
Technology Bull 3X Direxion
1 Year: +26.15%
5 Year: +624.40%
10 Year: +2,872.82%
TQQQ
Ultrapro QQQ ETF
1 Year: +6.35%
5 Year: +522.69%
10 Year: +3,522.07%
UCO
Ultra Bloomberg Crude Oil ETF (2x)
1 Year: +146.76%
5 Years: +5.92%
10 Years: -66.54%
TECL top holdings include about 50% AAPL/MSFT/NVDA/V/MA—all great companies IMO.
My general investment thesis is that there might be some contraction in Growth as the Fed tightens but tech is obviously not going anywhere, and inflationary concerns should be hedged by commodity exposure, and beyond Ukraine I expect oil to surpass 2008 peaks, and lastly rents will rise faster than inflation and real estate exposure such as with Blackstone (BX) is a good idea.
I’m thinking:
25% TECL (would like to hear any case for TQQQ instead)
25% UCO (I like the exposure to commodities rather than exploration or downstream)
25% BX (Not leveraged and all revenue from advisory fees)
Looking for another 25% of something for that tail event if TECL and UCO both become worthless. Thoughts on GLD/UGL? Or an absolute return product? Or WEAT? Or TAIL? Or VIXY? Or metal miners (MNM)?
Funds would have to be large and liquid.
Thank you very much.
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