TQQQ vs QQQ 22 Years Simulation

[Scataphagos]

"Meaningless" is harsh, it literally shows more information. I would show both charts to someone unfamiliar with QQQ/TQQQ and/or leverage... Both charts in tandem help explaining how TQQQ turned out a changing investment for some people in hindsight, but carries certain risks. The zoom in on the good performance period for emphasizing what people probably expect when they buy and hold TQQQ...

"..what people probably expect when they buy and hold TQQQ..."

OP's chart shows that the TQQQ dropped from a high of nearly 10,000 to ~75. Who would "B&H" through such a decline? Nobody with any market sense at all would do such a thing?

However, next time I'll choose an adjective less harsh than "meaningless".

 

[ET180]

TQQQ is something you buy and close your eyes after QQQ drops about 30%. Then just pray that the ETF is not eventually liquidated like UWT was.

 

[murray t turtle]

TQQQ is something you buy and close your eyes after QQQ drops about 30%. Then just pray that the ETF is not eventually liquidated like UWT was.

%%
I NEVER tried the blind eyes trade, but most anything could work in a uptrending bull market.
Prefer praying to keep out of stupid stuff, but any prayer could work.
NOT saying those etfs are stupid/just more praying than =bless this mess.I do close my eyes about 7.777 or 8 hours a day....................................................................................

 

[mokwit]

I searched through the prospectus for termination event and all I could find was if the swap counterparty refused to deal. So it is basically arbitrary, albeit likely would be a factor of conditions. I also assume they could blow up from futures leverage like anyone else.

Anybody really looked at this?

 

[deaddog]

If you had bought 10K worth of TQQQ 10 years ago (Buy & Hold) you would now have over 475K and one hell of a rollercoaster ride.

Added: Sister triple inverse SQQQ; 10K is now worth less than 10 bucks

 

[Spaghetti Code]

As TQQQ was created in 2010, there was no data older than 2010. I did a simulation from 1999 when QQQ was created.

Being honest, I don't believe the graph you posted. The 3x target for the ETF is just that: a target. TQQQ frequently fails to meet this target, notably when volatility is high. Last Friday, QQQ gained 1.51%, while TQQQ gained 4.48%. If TQQQ was really 3x, it should have hit 4.53. In other words, it underperformed. Compounding this across multiple days is going to result in a really unpredictable price, which means your graph going back in time is going to diverge quickly.

 

[fiftium]

Being honest, I don't believe the graph you posted. The 3x target for the ETF is just that: a target. TQQQ frequently fails to meet this target, notably when volatility is high. Last Friday, QQQ gained 1.51%, while TQQQ gained 4.48%. If TQQQ was really 3x, it should have hit 4.53. In other words, it underperformed. Compounding this across multiple days is going to result in a really unpredictable price, which means your graph going back in time is going to diverge quickly.

You are right, TQQQ should have been even worse. And it has management fee. That chart is just an approximation.

 

[murray t turtle]

I searched through the prospectus for termination event and all I could find was if the swap counterparty refused to deal. So it is basically arbitrary, albeit likely would be a factor of conditions. I also assume they could blow up from futures leverage like anyone else.

Anybody really looked at this?

%%
Sure its possible+ lightening can hit anyone\ which is actually a much better chance than winning the lottery......................................................................
I've read the prospectus + annual report of TQQQ + UPRO/several times.
Really there are many more risks than that. BUT they have though of so many more risks + prepared for them, including a bankers dream of setting the closing price[24 hours discretion....]
I would say one of the bigger trading risks is on a day like this morning, up a bit down a bit sideways slop/better in cash qqq.
OR INVESTORS in TQQQ[not recommended by prospects/LOL], they dont have that risk/ but drawdow$n most will not want. Wisdom is profitable to direct.
Good comment\its 9;30 central/chicago time

 

[wmwmw]

I have a strategy that holds 50% in gold and 50% in TQQQ.
So in a bear market gold would go up big.
And the rule is when TQQQ drop 80% -90%, move the profit in gold into TQQQ.
What this strategy plays out since 1999? I use GLD to represent gold but could not set up a GLD chart since 1999. The earliest date I could get for GLD was 2004.

 

[wmwmw]

I research gold ETF and could not find any gold ETF that was earlier than Nov, 2004.
So I would just start the strategy from Nov,2004.
Since 2000 bear market was a rare event and is not likely to happen again in the future, while 2008 bear market was more like a typical bear market.

So GLD starts in Nov,2004 at 45, while TQQQ at about 400.
In early 2008, TQQQ drop to 40( the lowest was about 16) while GOLD was 90.
If I move GLD profit into TQQQ, today I would make 159 times profit.
If I move all GLD into TQQQ, I would make 318 times profit.
If 2008 bear market did not happen and TQQQ never drop below 40, I would make 20 times profit.
If I did not hold any gold, but all TQQQ, I would make 31 times profit.
For the same period, QQQ made 10 times profit.
All these scenario beat simply holding QQQ.
The conclusion show that barring a big bear market like 2000 bear market, holding TQQQ or TQQQ + GOLD handly outpreform holding QQQ.