March 11, 2020
Leveraged ETFs are no more dangerous than any other ETF or Mutual Fund. They simply follow a calculation that is based on elementary school math. I like using leveraged ETFs as long term investments because they are mathematically designed to outperform in uptrends as well as downtrends. The risk, is that they will temporarily underperform in a sideways market or if the indexed market should drop 33% (for a 3x fund) or 50% (for a 2x fund) in a single day. Over the past ten years UPRO has a peak appreciation of over 1200%, SSO has over 600% and SPY is still under 200%. Running simulations all the way back to 1950 shows even more spectacular results. Warren Buffett recommends putting your money in an index fund for optimal investment results. I would add that you should also put some small amount of money in a leveraged index fund for even better results.