Safest way to make 1% per month
- Thread starter tonyf
- Start date
Can God make a rock so big he can't lift it? You're chart was fun and must of taken a bit of time making it, but not anywhere near accurate to reality, since the product didn't exist at the time. Do yourself a favor and actually go to stocksplithistory.com and check out TQQQ stats and see it has enjoyed a 60% yearly return for ten years, while QQQ has had a modest 22% gain each year.
What is safe now and has a track record over the last decade?
Intel = 13%
Msft = 30%
Aapl = 29%
BA = 15%
BRK.B = 15%
BAC = 20%
VYM = 13%
TQQQ = 60%
Last word of advice, = Trade what is real, not what you think. When the tides change, don't trade it.
Now, make a new chart!!
That's interesting. You take a lien on the land then, or the construction, or both? I suppose the worst risk is that there's a downturn and you're the proud owner of a half-built house and a lot?
It's hard not to be condescending against this so please know I'm trying so very hard not to be. TQQQ is simply 3X the daily percentage return of QQQ. It's trivial to determine how TQQQ would have performed in any time period that QQQ traded with a simple excel spreadsheet that calculates 3X the daily percentage return of QQQ, takes about 2 minutes to download the QQQ returns and 5 minutes to build the spreadsheet. If anything TQQQ sometimes has tracking errors on the down side, so that is a conservative recreation of what TQQQ would have returned. If you believe something specific my methodology is in error, I'm happy to have an intelligent discussion about that. If you want to just say "you're wrong about how TQQQ would have performed back in 2000 because look at how it performed in the last 10 years and it didn't exist then"....well then we just can't have an intelligent adult conversation. At the beginning of this thread, you didn't even realize that 3x funds returned 3X the percentage daily return, which is a fundamental aspect of how the fund works. It's hard to believe you would still be telling someone who clearly knows at least a tiny tiny bit more than you about this product that they're wrong, basically because you say so.
Curiously, on the left side of the graph, TQQQ seems to decline at about three times the rate of QQQ; however, on the right side, it doesn't converge towards QQQ at all. I would think that it should rise at three times the rate QQQ is rising, and close the distance to QQQ during the rise. It appears to be rising at a factor of less than one, with respect to QQQ.
How do you explain this?
Not to beat an already dead horse, but you seem to enjoy it, so here goes.
1) The primary reason you're misguided is that you believe the multiple is bad, where I believe it enhances what is working. I very much trade on margin when it works and know how the 3x products work since I've traded them for years with better than average returns. Look at SVXY , that should explain to all the downside of 3x
2) Your Nasdaq bubble argument is not valid because you believe it's the same product today as in 2000. Spend some time and read through the list of companies from 2000 that were part of the Q's here
https://en.wikipedia.org/wiki/Dot-com_bubble#Companies
Then take a look at the current line up here
https://www.slickcharts.com/nasdaq100
They share the same index name only, but are hardly the same product. You're turn.
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His chart math is not accurate. Look at a real chart of both products and see how they correlate.
I did before I posted. But TQQQ began trading after the initial QQQ decline, so can't really compare his chart with the real chart.
Short of an explanation from him, I'd have to agree that there is some sort of error somewhere.
Once again, TQQQ returns 3X the daily percentage return of QQQ. That's a very different thing than returning 3X QQQ. Here's a little demonstration, assume we start out with QQQ at 100 and we have the following changes over 3 trading days.
QQQ/ % Change in QQQ/% change in TQQQ/ TQQQ
100/ 0/0/ 100
90/ -10%/ -30% / 70
99/ +10%/ +30%/ 91
In just 3 trading days you have QQQ down 1% from the start and TQQQ down 9% from the start instead of the 3% one may naively expect if they thought that TQQQ actually returned 3X QQQ over time. The return of a 3X fund over time is highly dependent on the path of the underlying and will almost never return 3X the underlying over time. Sometimes it return 4X, other times 1X, in fact in some cases the underlying might be down over a period of months and the 3X fund is up or vice versa. It all comes back to the fundamental design of the 3X ETFs (and 2X and most inverse ETFs).
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