I have made SPY (broad S&P 500) a large part of my portfolio for long term investing, but is there any reason not to go with a leveraged ETF like UPRO instead? It's leveraged 3x, so whatever the S&P does long term, this fund *should* do 3x that. I figure as long as I believe the S&P will continue to grow long term, this fund should absolutely crush the regular SPY. This is money I am investing for 10 - 20 years from now.
UPRO is from ProShares and if you are not familiar it's a way to buy a leveraged form of an investment. Sometimes 2x or 3x of a particular index, and you can buy short or long positions as well. I was trying to purchase through Vanguard but they do not allow leveraged investments like UPRO, so I am going to start a Schwab account for this investment strategy.
Over the past 10 years UPRO has returned roughly 1,100% while SPY has returned 192%, so it's not exactly 3x, it actually ended up being more like 5x. The way I understand leveraged investments is it's not exactly a 3x factor, it could be higher or lower depending on some other factors.
I'm just trying to wrap my head around it and see if there's anything I'm missing or if this is a solid long term play. Any of you had any experience with leveraged assets like this? Or UPRO in particular?
So far the only real downside I see is that if I want to take it out during a down market, it could be costly, but that's about it.
Submitted January 18, 2021 at 10:39PM by gunsoverbutter https://ift.tt/3sEmARq
