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Comment by JumpCrisscross | Hacker News Reader

Leveraged ETFs, which aim to deliver leveraged intraday returns, don't mirror a leveraged position over the long term [1]. In particular, the more volatile the market, the worse the leveraged ETF's returns will be.

[1] https://www.montereyherald.com/2021/06/30/steven-merrell-fin...

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Of course not, hence why I said I would in principle prefer to use leverage directly. But as the laws do not permit me to do so in tax advantaged accounts, leveraged funds are the next best thing. But I certainly would not use a leveraged ETF outside of such an account, it's both cheaper and less risky to use leverage directly from your broker.

Do you know if U.S. retirement accounts allow the use of leverage? I am aware of Roth accounts and perhaps some other types of accounts that Americans can use that are tax advantaged. Do they allow margin accounts?

Your scheme only makes sense if you're eager to lose your shirt, so I don't know why you'd mix retirement accounts with it.

Yes, I'm sure I'm going to lose my shirt because I invest 7k a year into a risky asset.

Certainly there is no other possible way I could have other investments, including other retirement accounts, where I don't use risky assets... nor could it be that the key takeaway from my post is to put SOME of your capital into a risky asset, especially one that is tax advantaged and especially if you're younger.

Of course not, clearly the takeaway from my post is to lose your shirt by taking all your money and investing it into TQQQ.

You wasted so much energy on snark that you forgot to say anything of meaning...

Common sense would tell anyone who read my comment "shirt = investment in scheme" not "shirt = every investment you ever made in every form ever"

It's almost like you're insecure about how harebrained your scheme sounds.

Yes, the term "lose one's shirt" just means losing some portion of the money you invested. It most definitely does not mean what Oxford defines as "losing all of one's possessions", or what Collin's Dictionary defines as "to lose all that one has" (https://www.collinsdictionary.com/dictionary/english/lose-on...), or what Investopedia explains has its origin from the Great Depression to mean:

"This phrase implies not just loss, but ultimate loss. You may lose something important and precious but if you have lost the shirt off your back then you are not left with much."

Of course from context anyone would see that what you meant by it was just losing some portion of ones investment.

I must definitely have been too insecure to understand your point and thank you not only for clarifying your position, but making such a substantial contribution to this discussion.

You clearly have a deep and nuanced grasp of finance.

> You clearly have a deep and nuanced grasp of finance.

That's the beauty of it, I don't!

Not that I have time to be playing slots with just 7k, but I get to rely on people who do have that deep understanding! That way I (usually) don't have to listen to people who lack said understanding bray about TQQQ!

That being said it takes minimal common sense and the ability to read a prospectus to steer people away from holding a product designed as hedge for intraday strategies for long periods of time...

So congratulations on your first words that were able to cut through the viscous layer of "angsty 13 year old after being told to go to their room" coating everything you say :)

Retirement accounts, for people making good salaries, are the ideal place for risky investments, because they’re tax-advantaged and a small proportion of your savings.

I've never had a financial advisor or any money manager of any sort sink to the level of "hold TQQQ long term" for an investment account. Usually it's "risky" choices from a selection of "normal" funds.

And exactly it's a relatively small amount anyways... so why waste it on the fees TQQQ is bleeding?

53% annual gain wins many arguments.

But I’ll add (an hour later) that I think there are better, riskier options.

This is a huge deal. If you actually want a leveraged position on the Qs over the long term you either need to pay margin interest or deal with the overhead of rolling a properly structured call option trade. There is no free lunch to be had here. Buying at open and selling at close just isn't an effective strategy for retail traders.

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