Thursday, July 26, 2018

Leveraged ETFs (Core)

A long-term investment that forms the foundation of an investor’s portfolio.  A core portfolio strategy is to primarily own an investment that tracks the overall market.  A solid core holding gives an investor the flexibility to take a chance with riskier investments in other areas of the portfolio.

Calendar
Year
S&P 500
(UPRO)
Nasdaq 100
(TQQQ)
Russell 2000
(URTY)
Dow 30
(UDOW)
2018
13.7%
42.0%
28.3%
4.4%
2017
71.4%
118.1%
38.9%
99.1%
2016
30.8%
11.4%
60.1%
47.5%
2015
-5.2%
17.2%
-21.0%
-8.6%
2014
38.0%
57.1%
5.9%
26.0%
2013
118.5%
139.7%
147.9%
107.1%
2012
46.8%
52.3%
44.6%
26.4%
2011
-11.9%
-8.0%
-37.6%
9.0%
2010
36.3%
78.1%
90.1%
51.3%
Avg Ret.
37.6%
56.4%
39.7%
40.2%

A properly constructed core portfolio of leveraged ETFs will tend to outperform the benchmark.  A core portfolio strategy also results in a portfolio that is easy to monitor and rebalance because it only contains a few investments.