What would a good ETF/fund be to balance TQQQ?

S

Saltynuts

I'm looking for an ETF/fund where I can say invest X% percent of my portfolio in TQQQ, then 100% - X% of my portfolio in this other fund, where I'll still go way positive in the long run but this other ETF/fund will help minimize my drawdowns on the TQQQ side but still not hurt (help if possible) with the long term appreciation of the two positions overall.

In other words, a perfect ETF/fund that I am talking about would be one that that goes up a lot over time but has, during general market pullbacks, an inverse relationship with TQQQ to the greatest extent possible.

Any suggestions to try and run my numbers on? I tried GLD as a gold fund, which funds obviously come to mind, but any other suggestions?

Thanks!!!
 
Saltynuts said:
I'm looking for an ETF/fund where I can say invest X% percent of my portfolio in TQQQ, then 100% - X% of my portfolio in this other fund, where I'll still go way positive in the long run but this other ETF/fund will help minimize my drawdowns on the TQQQ side but still not hurt (help if possible) with the long term appreciation of the two positions overall.

In other words, a perfect ETF/fund that I am talking about would be one that that goes up a lot over time but has, during general market pullbacks, an inverse relationship with TQQQ to the greatest extent possible.

Any suggestions to try and run my numbers on? I tried GLD as a gold fund, which funds obviously come to mind, but any other suggestions?

Thanks!!!
More...
Here is a good article on long term investing in TQQQ.

https://seekingalpha.com/article/44...ble-dca-only-for-those-highest-risk-tolerance
 
GLD beat TLT with a huge margin.
Since GLD started from 2004, it rised from $41 to 176 today.
While TLT rised from $87 to $137 for the same period.
More importantly, GLD rised from $41 to $110 at 2008 bear market while TLT rised from $87 to $120.

Also, gold goes up in long term, no matter it is bull or bear market.

2000 big bear market should not be projected since first you need a new big technology invention such as internet,then you need market to run into a big bubble. The probability of both happening is very low.If you hold capital to catch such a bear market, you will miss opportunity to grow your capital when such big bear market does not occur.
So only 2008 bear market should be put into consideration.

So I suggest 50% in TQQQ, 50% in GLD. Whenever TQQQ drop below 10%, inject all capital from GLD into TQQQ.
For last a few years we see TQQQ drop 70% but that didn't stop it's fast appreciation.
So only 90% drop should trigger injection.
 
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I don't quite understand. So tqqq is a leveraged QQQ instrument. If the drawdowns are too large for your risk tolerance why would you use this instrument in the first place? Same issue many (wrongly) take with fx. Many think fx is just leveraged gambling. You can trade 1000 or 500 dollars fx without being leveraged at all. It's sounds like as if you are trading 100:1 or 500:1 fx leverage and complain that the drawdowns are too large. Well, reduce your leverage then. It's really that simple. Tqqq is not a magic instrument. It's just leveraged vs QQQ and you actually pay for the provision of that leverage to the fund sponsor. You can't have it both ways, move large notional with small investment (=leverage) and at the same time avoid the increase risk. If you must trade larger notional with less than commensurate risk then you need to study more about portfolio risk diversification where you trade uncorrelated or lowly correlated assets in a portfolio and benefit from portfolio risk diversification. That can get technical quite quickly and Tqqq is not gonna help you with that pursuit. Just my 2 cents.

Saltynuts said:
Nice article fan27, thanks! Those huge drawdowns are indeed what I'm trying to fight against.
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Saltynuts said:
I'm looking for an ETF/fund where I can say invest X% percent of my portfolio in TQQQ, then 100% - X% of my portfolio in this other fund, where I'll still go way positive in the long run but this other ETF/fund will help minimize my drawdowns on the TQQQ side but still not hurt (help if possible) with the long term appreciation of the two positions overall.

In other words, a perfect ETF/fund that I am talking about would be one that that goes up a lot over time but has, during general market pullbacks, an inverse relationship with TQQQ to the greatest extent possible.

Any suggestions to try and run my numbers on? I tried GLD as a gold fund, which funds obviously come to mind, but any other suggestions?

Thanks!!!
More...
Rather than hedge with another ETF you could manage your portfolio.

Take a moving average or draw a trend line and go to cash when TQQQ crosses it to the down side. Buy when it crosses to the upside.
 
DiceAreCast said:
I don't quite understand. So tqqq is a leveraged QQQ instrument. If the drawdowns are too large for your risk tolerance why would you use this instrument in the first place? Same issue many (wrongly) take with fx. Many think fx is just leveraged gambling. You can trade 1000 or 500 dollars fx without being leveraged at all. It's sounds like as if you are trading 100:1 or 500:1 fx leverage and complain that the drawdowns are too large. Well, reduce your leverage then. It's really that simple. Tqqq is not a magic instrument. It's just leveraged vs QQQ and you actually pay for the provision of that leverage to the fund sponsor. You can't have it both ways, move large notional with small investment (=leverage) and at the same time avoid the increase risk. If you must trade larger notional with less than commensurate risk then you need to study more about portfolio risk diversification where you trade uncorrelated or lowly correlated assets in a portfolio and benefit from portfolio risk diversification. That can get technical quite quickly and Tqqq is not gonna help you with that pursuit. Just my 2 cents.
More...

It is not only a drawdown thing.
If a serious bear market happens TQQQ could significantly underperform QQQ in the long run. That 's why you need to hold some fund to prevent this event from impacting your portfolio.

https://www.elitetrader.com/et/threads/tqqq-vs-qqq-22-years-simulation.356593/
 
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