Why Shana HATES These ETFs

So, I want to start by saying that these are not funds that are meant for long-term hold holds.

Uh, especially not QLD.

In fact, there is a major disclaimer on the um landing page for that fund saying this is not meant for uh being held for more than a day. um we'll get into the the trader funds and how they're a little bit different um I'm sure but um from the status of the exposure strategy all four of these funds are two times levered to a respective index um QLD MQ and QQQP to the NASDAQ 100 and SPY to the S&P 500 um levered funds are using derivatives uh to gather their leverage and they are levered not just on upside but on downside.

So you have to have really high conviction in the outperformance of this particular uh um index uh if you're going to invest in these especially QLD it's it's a trading fund it is not meant to be held for more than a day it resets daily uh but the aspect of this that is worth noting is that if you go up 100% that's great but if you go down 100% you got to go up 200% to get your money back.

So, um, it magnifies the risk and so volatility in these markets can be high and volatility is not your friend when you're looking at levered ETFs because you have to get double the return of the downside uh to match, you know, the potential upside.

So, you really got to get it right.

And that's why I don't typically suggest using these products at all unless you are an active trader and you're looking to hedge or really um convey a high conviction and in something to happen in a very short time period.