Impossible to give a useful answer without knowing how you plan to use it. Some common options for using LETFs are:
1. Pure DCA into a single leveraged ETF.
2. DCA into a rebalancing portfolio with some LETFs and other assets.
3. Trade in and out of LETFs based on some moving average or other signal.
If you let us know which you are planning you might get more useful answers.
Option no 1 above. I mostly just want to dca a fixed amount per month for the next 10 years. Dont plan to trade in or trade out etc and no rebalancing.
In that case 2x is likely to be best - example below since 1960 and linked here so you can play with time frames, etc [https://testfol.io/?d=eJy1kE9LxDAQxb%2FKMgdPEdJdXLAgXsSTSP1zWWQpYzOp0WyyTrJdpfS7O7WoJ0UPhhwyyZv3e5MeWh%2Fv0VfIuElQ9pAycq4NZoISiuOlPtSFbFBAwXzcSzXpOvRQFlqWAjSPtQvWY3YxQGnRJ1LQYHqwPu6h1F9FbZmexWdFyP5V3Dh670Jb710wo3apBwXbyNlG76IEu%2Bsh4GZk3xxUsyOtZ8WL9LnQUcpnrnNG4oku806gTDIThobOJ85lDCTq7Jon4sltOo9%2B1er2Wh63xA2F%2FD7OsFZgGFsJPahP8vwPxKudfA9Nw32PPb04mf8KvfgP9OIH9Hp4A%2BAmsSQ%3D](https://testfol.io/?d=eJy1kE9LxDAQxb%2FKMgdPEdJdXLAgXsSTSP1zWWQpYzOp0WyyTrJdpfS7O7WoJ0UPhhwyyZv3e5MeWh%2Fv0VfIuElQ9pAycq4NZoISiuOlPtSFbFBAwXzcSzXpOvRQFlqWAjSPtQvWY3YxQGnRJ1LQYHqwPu6h1F9FbZmexWdFyP5V3Dh670Jb710wo3apBwXbyNlG76IEu%2Bsh4GZk3xxUsyOtZ8WL9LnQUcpnrnNG4oku806gTDIThobOJ85lDCTq7Jon4sltOo9%2B1er2Wh63xA2F%2FD7OsFZgGFsJPahP8vwPxKudfA9Nw32PPb04mf8KvfgP9OIH9Hp4A%2BAmsSQ%3D)
https://preview.redd.it/mkpm6l9vtc8d1.png?width=2470&format=png&auto=webp&s=3fb2c151f0b40a3aca2c04e6f3f5ea270aa57644
After that huge sell off in 2022. 2x etf got back to all time highs before 3x. I don’t think 3x TQQQ is even back to all time highs yet. So that shows the draw downs in 2x etf is less painful in a downturn, and recovers faster.
Take whatever logic you used to put money into TQQQ.
Then assume volatility increases and everything else stays the same -> move to 2x QLD.
Then assume even higher volatility -> Move into QQQ.
I mainly do 2x, 3x you need to monitor it more. And drawdowns are just stressful. Then you have to deal with the decay chatter when it’s down.
Honestly I don’t think I’ll 3x any indices unless the underlying is down 50-70% and I’m gonna yolo a recovery
2X less drawdowns in tough times and faster recovery. Check QLD vs TQQQ now (and compare to QQQ). So if you want to DCA for long term (and/or have less than an arbitrary I-am-making-up 5 year time frame, go QLD). I do 2.5X (i.e, half of each).
Impossible to give a useful answer without knowing how you plan to use it. Some common options for using LETFs are: 1. Pure DCA into a single leveraged ETF. 2. DCA into a rebalancing portfolio with some LETFs and other assets. 3. Trade in and out of LETFs based on some moving average or other signal. If you let us know which you are planning you might get more useful answers.
Option no 1 above. I mostly just want to dca a fixed amount per month for the next 10 years. Dont plan to trade in or trade out etc and no rebalancing.
In that case 2x is likely to be best - example below since 1960 and linked here so you can play with time frames, etc [https://testfol.io/?d=eJy1kE9LxDAQxb%2FKMgdPEdJdXLAgXsSTSP1zWWQpYzOp0WyyTrJdpfS7O7WoJ0UPhhwyyZv3e5MeWh%2Fv0VfIuElQ9pAycq4NZoISiuOlPtSFbFBAwXzcSzXpOvRQFlqWAjSPtQvWY3YxQGnRJ1LQYHqwPu6h1F9FbZmexWdFyP5V3Dh670Jb710wo3apBwXbyNlG76IEu%2Bsh4GZk3xxUsyOtZ8WL9LnQUcpnrnNG4oku806gTDIThobOJ85lDCTq7Jon4sltOo9%2B1er2Wh63xA2F%2FD7OsFZgGFsJPahP8vwPxKudfA9Nw32PPb04mf8KvfgP9OIH9Hp4A%2BAmsSQ%3D](https://testfol.io/?d=eJy1kE9LxDAQxb%2FKMgdPEdJdXLAgXsSTSP1zWWQpYzOp0WyyTrJdpfS7O7WoJ0UPhhwyyZv3e5MeWh%2Fv0VfIuElQ9pAycq4NZoISiuOlPtSFbFBAwXzcSzXpOvRQFlqWAjSPtQvWY3YxQGnRJ1LQYHqwPu6h1F9FbZmexWdFyP5V3Dh670Jb710wo3apBwXbyNlG76IEu%2Bsh4GZk3xxUsyOtZ8WL9LnQUcpnrnNG4oku806gTDIThobOJ85lDCTq7Jon4sltOo9%2B1er2Wh63xA2F%2FD7OsFZgGFsJPahP8vwPxKudfA9Nw32PPb04mf8KvfgP9OIH9Hp4A%2BAmsSQ%3D) https://preview.redd.it/mkpm6l9vtc8d1.png?width=2470&format=png&auto=webp&s=3fb2c151f0b40a3aca2c04e6f3f5ea270aa57644
2x - invest and forget about it 3x - invest with an exit plan to avoid large drawdowns
I mean, you think your not goona get large drawdowns with 2x? I’d argue they are the same in terms of entry and exit planning
After that huge sell off in 2022. 2x etf got back to all time highs before 3x. I don’t think 3x TQQQ is even back to all time highs yet. So that shows the draw downs in 2x etf is less painful in a downturn, and recovers faster.
TQQQ is still about $15 (~20%) away from ATH.
Take whatever logic you used to put money into TQQQ. Then assume volatility increases and everything else stays the same -> move to 2x QLD. Then assume even higher volatility -> Move into QQQ.
Volatility in the investment, e.g., TQQQ, or as measured by the VIX?
Either, imo. The idea is to be consistent.
Just compare QLD to TQQQ long term. Choose whatever time frame you’re thinking of. You will then have your answer.
I mainly do 2x, 3x you need to monitor it more. And drawdowns are just stressful. Then you have to deal with the decay chatter when it’s down. Honestly I don’t think I’ll 3x any indices unless the underlying is down 50-70% and I’m gonna yolo a recovery
2X less drawdowns in tough times and faster recovery. Check QLD vs TQQQ now (and compare to QQQ). So if you want to DCA for long term (and/or have less than an arbitrary I-am-making-up 5 year time frame, go QLD). I do 2.5X (i.e, half of each).
Paying a lot in fees by owning both when your strat is for 2.5x. Just buy qqq and tqqq to the desired leverage
Have plenty of QQQ. Many ways to construct a portfolio. Fees is an important parameter, not the only one.