1Yr·

Hey Dear Getquin Community

Does it make sense for a long-term investment (20-30 years) to invest in the Nasadaq 100 ETF 3 Lev $QQQ3 (+3.13%) or does it make more sense to choose and save in the normal Nasdaq 100 $CSNDX (+1.75%) and to save ?

20 Comments

Aditya@OnlyETF

1Yr

If it drops by 30%, you lose everything.

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Tino@parlania

1Yr

@OnlyETF as if the nasdaq would fall 30% in one day

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Colin@CeeDee

1Yr

@OnlyETF simply insert a stop loss

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Kalle2@Kalle2

11Mon

@parlania that's what i ask myself ?!

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Chandra@Chandra

9Mon

@OnlyETF @Kalle2 Don't worry, there are control mechanisms on the stock market that prevent such strong fluctuations. They are called circuit breakers. If the S&P 500 falls by 7% from the previous day's closing price, trading is interrupted for 15 minutes. At 13% again and at 20% trading is stopped for the day.

The Nasdaq 100 and the S&P500 are similar enough that -30% for the Nasdaq should be out of the question. Although of course -20% is also unattractive if they are triple leveraged.

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Manuel B.@JimPanse86

8Mon

@OnlyETF it cannot fall by 30% in one day - at -20% all trading per day is suspended until the following day.

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DerMartin@DerMartin

5Mon

@JimPanse86 But then you can't sell at -20, you have to wait for the next day and then you are at -30

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Kalle2@Kalle2

1Yr

So my savings plan is up 68%, you just have to set a stop loss. The €25 a week won't hurt either if they're gone ;) I'm curious to see what @TopperHarley has to say about it 😜

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Money Game@MoneyGame

11Mon

I've been looking at the $QQQ3 for a really long time and I currently have over 100K in it myself. As long as the Nasdaq doesn't fall 30% in one day, there is no risk of a total loss.

The biggest risk is psychological. In a bear market, the ETF can fall by 80 or 90%. If you have all your money in it, that is of course psychologically brutal.

Just take a look at the long-term chart and there are also various backtest calculations which show that the returns are astronomically high. So far it's worked great and I don't see why it shouldn't continue in the future.

However, I would tend to get into a leveraged ETF after an index fall of at least 20% and not at an all-time high.

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Qube 🧊@qube_

11Mon

@MoneyGame do you sell when you fall below the 200 MA?

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Money Game@MoneyGame

11Mon

@qube_inv No, I don't intend to. I know that many people do this to reduce volatility and get back in when the 200 MA is exceeded. In that case, I'll just sit it out.

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Arlind@Lindi87

11Mon

@MoneyGame Hi, as I am still learning about the risk of leveraged ETFs, I wanted to ask what you mean by exceeding the 200 MA? (Because I don't understand that)

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Money Game@MoneyGame

11Mon

@Lindi87 MA stands for Moving Average. In other words, the moving average price of the last 200 days. Many who trade leveraged S&P 500 and Nasdaq ETFs sell when the price falls below the "200 MA price" and only get back in when the price exceeds the "200 MA price" again. This avoids the phases in which the ETF has fallen by 80+% in some cases. https://www.reddit.com/r/LETFs/comments/19bbdcu/200_ma_confusion/

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Arlind@Lindi87

11Mon

@MoneyGame Thank you for the quick reply

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Kevin E.@KevinE

1Yr

Definitely not for long-term investment!

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MoneyIncinerator@DoppelSchlechtMinus

1Yr

Neither. In the long term, I would rather diversify than bet on a specific focus.

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Kill_Baulitz@Johann_van_der_Smut

1Yr

The $QQQ3 is a gamble

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Luffy@Luffy3D2Y

1Yr

It can make sense if you are aware of the bet. Higher risk could mean more return, but also more loss if the bet doesn't work out. There is no right or wrong, because nobody knows the future. Some need more security, others risk more. Only you decide which ratio is the right one.

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FroschFabian@FroschFabian

1Yr

So far it has gone well, it can continue to do so, you just have to be aware that the risk of it falling sharply is also quite high

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Chandra@Chandra

1Yr

There is also an intermediate route, the $LQQ (Nasdaq x2)

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