![]() ![]() Not only that, but you can do this without needing to be approved for a margin account or indulging in any kind of complicated investing strategy. The unique selling proposition behind leveraged ETFs is that for a relatively high fee you can invest a small amount of money in a stock index and earn a much bigger return than you would get if you put the same amount of money into a regular, unleveraged ETF that tracked the same index. So what's the truth of the matter? Is TQQQ a way for the little guy to make big money, or is it just another much too risky get-rich-quick mirage that will leave naive retail investors hurting? What Is A Leveraged ETF? They explained they banned this kind of trading as it was too risky for the buy and hold investors the company supports.Īs could be expected, that prohibition has made leveraged ETFs like TQQQ more attractive to a certain kind of investor who assumes they are being barred from making certain investments because Wall Street wants to keep all the really good stuff for themselves. But I also knew that Vanguard hasn't allowed investors to buy TQQQ or any other leveraged ETFs on their brokerage platform since January of 2019. I had read reports posted in online forums of investors making hefty profits with TQQQ. ![]() At the time, all I knew about it was that it was a leveraged ETF which allows investors who don't have margin accounts to boost their gains or losses in the Invesco QQQ ETF ( QQQ ) by a factor of three. Roman, "Maximum Drawdown Distributions with Volatility Persistence", working paper, 2005.I was recently asked what the story was with ProShares UltraPro QQQ ( NASDAQ: TQQQ).
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