Yes, yes, we know the mantra. Their leverage entails certain "costs". But then, it entails certain "benefits" as well - i.e. being able to have less $$$ invested.
What would a good ETF/fund be to balance TQQQ?
- Thread starter Saltynuts
- Start date
Yes, yes, we know the mantra. Their leverage entails certain "costs". But then, it entails certain "benefits" as well - i.e. being able to have less $$$ invested.
I think a better alternative is to put 80% in TQQQ and 20% in GLD.
So the number looks like this:
If you hold all TQQQ from the inception,and there is no 90% drop, you make like 100 times.(the number may not be accurate.)
If you hold 80% TQQQ, 20% GLD from the inception,and there is no 90% drop, you make like 80 times.(the number may not be accurate.)
If you hold 80% TQQQ, 20% GLD from the inception and there is 90% drop in the first year, you inject GLD in the first year, you make like 110 times.(the number may not be accurate.)
Why I said this is a better alternative?
Because what if the 90% come in the second year or later?
In that case, TQQQ will first rise and then drop, so the number after its drop would be bigger, and GLD injection would play smaller role.So leave smaller capital in GLD would be better.
So the number looks like this:
If you hold all TQQQ from the inception,and there is no 90% drop, you make like 100 times.(the number may not be accurate.)
If you hold 80% TQQQ, 20% GLD from the inception,and there is no 90% drop, you make like 80 times.(the number may not be accurate.)
If you hold 80% TQQQ, 20% GLD from the inception and there is 90% drop in the first year, you inject GLD in the first year, you make like 110 times.(the number may not be accurate.)
Why I said this is a better alternative?
Because what if the 90% come in the second year or later?
In that case, TQQQ will first rise and then drop, so the number after its drop would be bigger, and GLD injection would play smaller role.So leave smaller capital in GLD would be better.
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Was gonna say something like 40% TQQQ and 30% each for GLD and EDV. There would be some zigging and zagging with those 3.
Those ETFs trade millions of shares a day, should be able to handle your account.
What is it they say about letting the tax tail wag the investment dog?
You'll have to test the difference in paying tax now on gains vs paying tax later on reduced gains due to hedging.
Another old adage: Let your winners run and keep your losses small. One big win makes up for a lot of small losses. The fact you think losses suck shows that possibly emotion plays too big a part in your trading.
Like I said dude, I'm not discounting your strategy. You seem to think it is the best thing ever. I will look into it in.... OTHER THREADS, I promise. This thread is about the subject matter in the OP. Thanks!
Well, you know I won't be able to test that with TQQQ wmwmw, because TQQQ has not had a 90% drop since TQQQ inception.
Don't you also think waiting for a 90% drop is too long? I mean, that will happen so very rarely. What if you made it a 60% drop or 50% drop? Sure you wouldn't be getting in at a good a price, but you'd be getting in much more often at a pretty darned good price! All this can be tested, with the exception as above of stuff that has not happened (a 90% drop in TQQQ since its inception).
That is why I change my mind and suggest to hold 80% in TQQQ and 20% in GLD. So if there is no 90% drop, we still can make 80 times.
70% drop doesn't imply a bear market drop, while our goal is to protect porfolio from bear market.
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So, from the 2/10/11 start date of TQQQ, if you have put $40 in TQQQ, $30 in GLD and $30 in EDV I calculate your account would have grown to $1,878.63 today, giving an IRR of 29.70%, with a max drawdown of 32.99%. Not shabby at all.
It's a piker's product. Whatever you say, mate. And your real problem is your overconfidence. Because you are wrong several times in a single post. Leverage comes at a price, mate, it's called volatility of investment return. What you really should aim for is a maximization of risk adjusted return. You get that by investing in non correlated assets. What you do is buy 3x the same asset that is 100% correlated to itself. That is, mildly put, a stupid thing to do.
1. Overconfidence? LOL, this whole point of this thread is I am NOT confident in the product, hence my testing tons of different things to (hopefully) get a better overall long term result.
2. Yes, leverage comes at a price. Everyone knows that.
3. Yes, a 3x is going to have more volatility of investment return. Everyone knows that.
4. I *AM* aiming for maximization of risk adjusted return, that is what this whole thread is aimed at - can there be one or more different positions in *****non-correlated assets**** you hold with the great amounts of $$$ you free up by investing in TQQQ that, along with your TQQQ holdings, give on a higher risk adjusted return on your position than one would get by instead investing 100% of your money in QQQ. You LITERALLY just summed up what this thread is looking for lol.
5. Wait, if you have a 3x long fund, and a 3x short fund, on the same underlying position, they will offset? CRAZY DUDE!!! Everyone knows this, I stated as much many posts ago in response to Ken's answer. That is of no relevance, at all.
At this point you are just arguing for arguments sake lol...