Are Leveraged ETFs Really Worth It?

10-Year ETF Reality Check Series_part 2

This post is part of a 4-part series analyzing long-term ETF strategies, risks, and smarter investment paths.

“Stocks always go up.” If that’s true, why not invest in 2x or 3x leveraged ETFs and make more money, faster?

It sounds logical—until you face your first major drawdown.

What Leverage Really Means

Leveraged ETFs like SSO, UPRO (for S&P 500) or QLD, TQQQ (for Nasdaq 100) amplify your gains—and your losses. They aim to double or triple the daily movement of the underlying index. While they outperform during strong bull runs, they can destroy value in sideways or volatile markets due to daily rebalancing effects.

Performance Comparison (2015–2024)

We tested VOO/SSO/UPRO and QQQ/QLD/TQQQ from January 2015 to December 2024 with a $10,000 starting investment.

Performance Comparison of VOO, SSO, UPRO

Performance Comparison of QQQ, QLD, TQQQ

Growth Simulations

The charts below show portfolio growth. While leverage increases upside, the volatility and drawdowns grow even faster.

Portfolio Growth of VOO, SSO, UPRO


Portfolio Growth of QQQ, QLD, TQQQ

So Why Not Just Use Leverage?

Because when the market crashes, the emotional cost is often greater than the financial one.

  • Higher leverage = higher drawdown. This can be deadly if you need cash at the wrong time.
  • Less cash buffer = less room for survival and rebounding.
  • 2x or 3x ETFs require cash management skills, emotional discipline, and a separate income source.

  • In 2022, TQQQ crashed more than –79%. QQQ? It fell by just –32%.

    This wasn’t just a number. For many, it meant panic, forced selling, or abandoning their long-term plan. The bigger the leverage, the bigger the emotional test.

Leverage returns more. But demands more.

📌 Recommended: Keep 6–12 months of living expenses in cash. Don’t go all-in. And know your emotional limits.

Discipline is the real alpha. Routines turn volatility into opportunity.

Final Thoughts

People say “stocks always go up.” If that’s true, shouldn’t leveraged ETFs be the best way to build wealth?

Not quite. If you need money while the market is down, you might sell at a huge loss. Risk management isn’t just about numbers—it’s about timing, emotions, and lifestyle stability.

Before reaching for leverage, ask yourself: Can I survive a 70% drop without panic?

I hope this note brings a little more clarity, calm, and richness to your life.





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