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Economy stonks only go up v6.1

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Cid said:
Dollar cost averaging rather than averaging down.

Without the leverage averaging down is fine. If you buy near the bottom and it does nothing you won't lose much.

With leverage that's a different story. Sideways action will result in losses. Volatility will result in losses. Even if the index doesn't go down you'll lose money. If the market goes up they need to increase their position so that they can match the next day if the market goes down they sell positions. Essentially they buy high, sell low.

When I said they're not made for long term I wasn't wrong. The stock market can go up 5% in a year while its 3x leveraged ETF can go down 10% in the same year. It's because they're designed to replicate the day to day trading.

You are right that holding them long term can be very financially beneficial, but I didn't really contend that. In fact I plan to do the same thing.

What I'm saying is that even if you time the absolute bottom of the market which is what you're basing your investment timing off you may miss the bottom of the leveraged ETF.

And that if you miss the bottom of the market you may drastically miss the bottom of the leveraged ETF.

And that if you drastically miss the... you get the point right?


Cliffs:
You risk blowing your load too early.

And I'm being nitpicky, the strategy I plan to employ is only slightly different. But it comes from love bro, small differences can result in drastically different returns, I ain't trying turn this into a dick measuring contest.
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Me neither..but you are wrong about your premises..etf's reflect the index change pretty well thats really their purpose

Just because its leveraged doesnt mean i am buying on margin..it just gives me 3x purchasing powery..say i got 100k to invest..well with a triple levered etf i have practically 300k without margin risk

If you are talking about the drawdown you are right..i may be more down temporarily than with an unleveraged etf..but since this is a lpng term play i am not worried about it having time to ride out 10 years when the levered strategy will way outperform as reflected by tqqq chart since 2012 vs nasdaq itself
 
Futures limit down. Drops incoming. Now, do I hold the puts for the duration? Or take the money and run!?
 
reveler said:
sell to close, then do it again on the next bounce.
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I’d wager a huge sell off Thursday when unemployment numbers come out.


If there’s a slight spike before then I’d take the gains and run
 
Huh. Apparently stonks only go down now.

stock-market-crash-no-surprise.jpg


Bad things happen to me every time I try to invest in something going up. I've learned my lesson.
 
Parmenides said:
Me neither..but you are wrong about your premises..etf's reflect the index change pretty well thats really their purpose

Just because its leveraged doesnt mean i am buying on margin..it just gives me 3x purchasing powery..say i got 100k to invest..well with a triple levered etf i have practically 300k without margin risk

If you are talking about the drawdown you are right..i may be more down temporarily than with an unleveraged etf..but since this is a lpng term play i am not worried about it having time to ride out 10 years when the levered strategy will way outperform as reflected by tqqq chart since 2012 vs nasdaq itself
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On the day to day they track the market extremely effectively. That's their purpose.

They don't track the long term and can lose money when the market is making money

You have 100 in the market. It goes up by 10% you now have 110. It goes down 10%, you're back to 99.

You have 100 in the market with a 3x leveraged etf. It goes up by 10% with the leverage you now have 130. It goes back down 10% and your 130 turns to 91.

The ETF has tracked the market perfectly but due to the nature of leverage it's lost money while the index has almost stayed the same.

It works the same way to a lesser extent with small fluctuations as well.

If the recovery is slow that ETF will lose money and you'll miss buying opportunities.
 
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Cid said:
On the day to day they track the market extremely effectively. That's their purpose.

They don't track the long term and can lose money when the market is making money

You have 100 in the market. It goes up by 10% you now have 110. It goes down 10%, you're back to 100.

You have 100 in the market with a 3x leveraged etf. It goes up by 10% with the leverage you now have 130. It goes back down 10% and your 130 turns to 91.

The ETF has tracked the market perfectly but due to the nature of leverage it's lost money while the index has stayed the same.

It works the same way to a lesser extent with small fluctuations as well.

If the recovery is slow that ETF will lose money and you'll miss buying opportunities.
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They dont track perfectly due to rebalancing but pretty close and will make money long term way in excess of underlying index despite the difference if the market is up materially

Also your arithmetic is off..it will take 9% to get from 110 to 100 so on the leveraged side you would lose 35 not 39..still a valid point tho
 
Ugh... at this rate 50% of my investments are going to be wiped out by the time this coronavirus panic is over.

Another bloodbath incoming.
 
Rob Battisti said:
Futures limit down. Drops incoming. Now, do I hold the puts for the duration? Or take the money and run!?
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They put up the stimulus package vote again for 9:45..good chance its voted for in which case the market will pop so would sell into the open..or employ a mixed strategy by selling half in case dems sabotage again
 
Parmenides said:
They put up the stimulus package vote again for 9:45..good chance its voted for in which case the market will pop so would sell into the open..or employ a mixed strategy by selling half in case dems sabotage again
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that’s the biggest fear. Will likely go mixed because I just think there is a good chance they still sink it. Would kick myself if I sold, they tank it and it keeps going down.
 
Cid said:
On the day to day they track the market extremely effectively. That's their purpose.

They don't track the long term and can lose money when the market is making money

You have 100 in the market. It goes up by 10% you now have 110. It goes down 10%, you're back to 100.

You have 100 in the market with a 3x leveraged etf. It goes up by 10% with the leverage you now have 130. It goes back down 10% and your 130 turns to 91.

The ETF has tracked the market perfectly but due to the nature of leverage it's lost money while the index has stayed the same.

It works the same way to a lesser extent with small fluctuations as well.

If the recovery is slow that ETF will lose money and you'll miss buying opportunities.
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Change the going down by 10% in your first example to 99.
 
And....we're off!

DOW sitting at 18.6k just an hour into trading.
 
Is there a brokerage app where you can trade after hours? It's very annoying to have good stock ideas on Saturday and find out Monday morning that the stock is up 10% pre market.

Also when there is bad news and you want to sell you can't but obviously many people are because the price is tanked by the time Monday rolls around. Is this just another function of it being a rigged system where the big dogs can protect their investment and we get smoked?
 
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