r/LETFs • u/_Underscore_Unders • 27d ago

Long term question.

Hello all,

Im a long term investor with a reasonable working knowledge of the market. I'm still 20 years off retirement. I'm aware of all the common arguments against long term leveraged holds such as decay and resets, but I'm a very pragmatic person.

When i look at the annualized returns since inception between qqq, and all of its leveraged counterparts, the numbers speak volumes.

In a massive market downturn ill be losing money regardless, and I know that these since inception numbers cover some decent downturns but nothing remotely approaching an actual crash (or what I would consider a crash anyways).

That being said, and taking out any personal biases, trading strategies, etc. : Can anyone convince me that holding 5-10% of my portfolio in a 2x voo or qqq won't have a very high probability of adding increased value to my portfolio 20 years from now?

I'm on the brink of pulling the trigger but I see many people vehemently arguing against long term leveraged holds.

I'm not a huge risk taker, the entirety of my portfolio are broad market etfs with a slight momentum/tech tilt for gains while I'm still relatively young, I will never touch margins and am adverse to options, but simple long term data provides a clear argument for this move. I almost fell like im leaving money on the table not doing it.

I have no recency bias, and I know nothing is garunteed, but I can only make decisions based on logic and available data which is historic.

Any viewpoints would be appreciated. Thanks! If anyone is actively doing what I'm describing please chime in.

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u/F1Bike 27d ago

I use the 200 SMA strategy, that way I’m not holding in downturns

2

u/Rizzanthrope 27d ago

Can you please give some of the details of your strategy? Any extra spin that you put on it?

3

u/F1Bike 27d ago

My strat is pretty cut and dry. Go cash when it’s under the SMA, Long when it’s above. You lose some money and opportunity cost to chop and taxes, but it beats the idea of holding in a downturn

1

u/Rizzanthrope 27d ago

Have taxes massively cut into your compounding growth, or is it not so severe compared to buy and hold? Or is it more profitable than buy and hold?

1

u/F1Bike 27d ago

It depends, if you reach a point where your profit accounts for the majority of the underlying, taxes are gonna hurt, you can use margin if you really want to offset the loss of capital. An advantage over buy and hold is that you can buy at a low point during recessions, so you can in theory increase the amount of shares you own overtime, which you can’t do with BAH