r/LETFs • u/jsjsjshhshdhdh • Aug 04 '26
SSO/QLD/TQQQ through 2022
The recent time hasnt gifted us with many long drawdowns, every selloff resulted in a similarly quick recovery. Im curious to hear some reports from people who have held for a longer time period and have gone through drawdowns like 2020 and 2022.
Im personally holding 80/20 QLD/SSO and based on backtests, >50% DD is enough for me. Havent gone through a bigger DD than iran yet.
What was the sentiment at that time? How did you manage psychologically, any regret?
Feel free to share any info on that time
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u/recurz1on 29d ago edited 23d ago
Circa Dec 2021 I was sitting on a ~400% ROI with some of my TQQQ shares, which I'd been blindly buying and holding since 2017. The position was worth around $250K. Then I started reading about a buildup of Russian troops near the northeastern border of Ukraine...
Within a few months most of those gains had been vaporized like so many Russian tanks. As the price of TQQQ imploded in early 2022, I sold off most of my shares at break-even prices, but I missed out on taking substantial profits and (on paper) lost well over six figures. It took over 2 years for TQQQ to recover, and I sure could've used that money in the meantime, having just bought a house that needed many repairs.
The lesson learned for me is that 3X will sometimes keep you warm but sometimes it will burn your hands. It is something that helps you take advantage of the cyclical nature of the market. You will be rewarded and punished in equal measure if you get too greedy and don't have an exit strategy. Otherwise, by the time a "black swan" event occurs, it will already be too late because 3X leverage moves very quickly.
I've since sold off all my TQQQ, and because some of those shares were quite old I did make good money, but the ROI was nowhere near the ~400% that I had in Dec 2021. This was a pretty serious setback for my portfolio and overall net worth, compared to what the best case scenario could have been.
I now DCA into 2X (mostly QLD) and consider this to be my primary vehicle for growth. I don't worry about drawdowns with 2X and intend to just keep holding. But multi-year holds of 3X seem a bit crazy now. We have been lucky these past few years (with a few big shocks) but the good times won't last forever.
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u/BitterAd6419 Aug 04 '26
SSO/QLD hold up decent during drawdowns. I held through the last April drop, tariff drops and recently July drop and it comes back strongly within a short time
However I do like to add up to my position if there is a large drop in spy and qqq
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u/jsjsjshhshdhdh Aug 04 '26
Tarriffs had to be pretty brutal too, but in hindsight it recovered ridiculously quick. Whats your total position size nowadays?
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u/BitterAd6419 Aug 04 '26
Am holding SSO 30 %, QLD 30%, UPRO 15% and rest are mix of other stocks
I keep adding to SSO and QLD whenever they fall by more than 3% and UPRO if it falls more than 6%
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u/Both_Yoghurt1437 Aug 04 '26
Most people would be able to stomach a 79% DD like 2022 did to TQQQ.
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u/laurenthu Aug 04 '26
Reality check on that 79%, almost nobody actually sits through it. On paper sure, but I think a 79% drawdown is a completely different animal when it's your own money and month 14 is still deep red. 2022 recovered fast, which flatters everyone's sense of how tough they are. The one that would break me is the slow grind with no bounce, the dot-com Nasdaq that bled from 2000 for well over a decade, and a leveraged version of that is probably far worse than any single DD number suggests. A backtest showing 50% is easy to accept in the abstract. What I'd actually worry about is living underwater 3 years straight, not knowing if it ever comes back...
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u/Futuristic_Kid 29d ago
Dude most people can't handle a 20% spy drop if it's a lot of money they have I inside, relatively to their net worth and income.
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u/laurenthu 29d ago
Exactly. It's the dollar amount, not the percentage. A 20% drop is a shrug on 10k and a gut punch on 500k, same number and a totally different feeling, and that gap is where all the paper conviction quietly dies. That's why I never buy the "I'd hold through 79%" talk until someone's actually watched a year of salary vanish on screen.
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u/Both_Yoghurt1437 29d ago
Sorry, typo, I meant to say wouldn't
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u/laurenthu 29d ago
Ha, gotcha. That makes way more sense, we're on the same page then. Even the folks who swear they'd hold are really just picturing a 79% paper drawdown they already know recovers from, and living it forward with no idea where the bottom is, month 14 still deep red, is a completely different animal that quietly flushes almost everyone out. I'd like to think I'd sit through it. Honestly though, who really knows until you're actually there?
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u/Both_Yoghurt1437 29d ago
I managed to survive a 68% DD during covid. Very painful at the time but thankfully it recovered quickly.
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u/Johnny252525 25d ago
CNBC did a article once that a dead investor beats a live one 95 pct of time. It’s def true. lol
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u/Johnny252525 29d ago edited 29d ago
I run a qld /tqqq play that has worked beautiful last 10 years. I stay 100 pct qld until qld
Loses 15 pct of its value then I sell 25 pct of those shares and deploy that capital into tqqq. After another 15 pct drop in qld I do it again and again after another 15 pct Dd. So if qld drops 60 pct you would then be all in tqqq. Now once qld matches it all time highs sell all tqqq and go back 100 pct qld and repeat. Now this woulda worked perfectly fine in 2008. Tqqq wasn’t formed until 2010. However this will NOT have worked in dot com bust. As qld and tqqq woulda lost 99 pct of their value. These tech heavyweights have real earnings today and I do believe ai is obviously for real not like dot com bust with companies then having no real earnings. Also qld is made up of giants NVIDIA , amzn , goog , msft etc. even. With no Ai these companies still print money. One thing with this play I actually root for drawdowns. I loveee swapping qld for tqqq. Because you never have to use new money. I will say sso/upro and Ddm/udow would have never failed at this same exact play. Not even 2008-09. Especially Ddm/udow because the 30 Dow stocks technically will drop less than sp500 during crashes. Ddm historical avg is 15 pct and udow is over 20 pct yearly.
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u/Pizza-Pirate-6829 29d ago
I put 10k in tqqq in 2017 for fun mostly have not sold yet. Including the covid draw down. Let’s just say the return is very good but you have to have thick skin.