I am making this post because this information is not out there and it seems like most of the "real investors" want to ignore these statistics.
I posted this over in r/stocks and the reception was not too positive so I thought to myself, "who would be dumb enough to agree with me?" Well, here I am!
Every time someone talks about TQQQ they only have negative things to say and they don't talk about it like regular long term investments. There are quite literally zero backtests that treat it as a long term investment. With a long term investment you pick a fund or a few funds, buy in and then consistently put money in no matter what the market is doing. But no one seems to acknowledge that if you chose to use the same strategy with TQQQ, even with it's exorbitantly high volatility, it will ALWAYS out perform a regular LT investment.
Instead when people talk about TQQQ they talk about it the exact opposite way that you're supposed to use the stock market; they try to time the market. "Leveraged ETF's shouldn't be held for more than a day" they say. So let me show you what the data says when you continually invest every month no matter what the market is doing for 10 years.
This is simply analyzing TQQQ, starting with $1000 and putting in 200 every month. Obviously you probably don't want to hold 100% TQQQ and common advice is to put in 10% of your income. 200/month is 10% of your income if you make 24k a year. Whereas the average income for individuals in the us is 31k (3100 a year invested) and the average household income in the US is 68k (6800 a year invested). I will post adjusted numbers for that over 10 years at the bottom.
http://imgur.com/gallery/RlbXBAN
Over 10 years TQQQ would return 19,237% ROI despite dropping more than 50% 3 times over the course of the 10 years. QQQ, with a downside of no more than 17% returned 3,461% in the same time frame. That is the equivalent of 5.5x greater return than QQQ.
And if you want to talk about trading psychology we can do that too. To continue to hold even in a downturn of over 50% just look at the percentage gain over the life of the investment. The investment could lose 96% of it's value (which is incredibly unlikely) and you would still have more than you initially invested. I mean in a bear market most people just distance themselves from the market and just continue to buy despite what's happening in the market anyways.
Do I think this investment strategy is for everyone? No. Its clearly not. But I'm 25, I have 40 years until I need this money anyways. Its definitely not for the feint of heart and if you can't manage your thoughts and emotions in a downturn then stick with regular, low risk etfs. But I can tell you this, the NASDAQ is mostly tech and tech is not going anywhere. Also market indexes are some of the only assets that can and will quite literally grow forever. Over time wealth redistributes; as larger companies die or are split up, smaller company's come up and take their place and indexes pick up these new stocks to continue to grow.
TLDR: the NASDAQ isn't going anywhere, tech will continue to grow, the backtests show that higher volatility (while significantly more stressful) is very much a good thing if the asset maintains value despite fluctuations.
Other results for average incomes:
1,000 initial investment, 259/month 32,080 total invested, 608,561 10y return
1,000 initial investment, 568/month 68,040 total invested, 1,261,642 10y return