TQQQ vs QQQ: What’s better?

TQQQ is a 3x leveraged ETF that follows the Nasdaq-100 Index. If on a given day Nasdaq returns 1% TQQQ will return 3%, as it is leveraged. Most investors use TQQQ for day trading for its big returns. Though the risk is also 3x. If on a given day Nasdaq goes down by 1% TQQQ will go down by 3%.

QQQ is one of the oldest ETFs out there that follows the Nasdaq-100 Index. It is not leveraged therefore it will have the same returns as the Nasdaq. It is suitable for long-term investments.

Let’s talk about the risk factor. QQQ is just like Nasdaq the same ups and downs. The real question is How risky is TQQQ? To answer this question, I am going to present some market cycles comparing TQQQ and Nasdaq-100.

Between 30 October 2023 and 20 January 2024. Nasdaq rose by 21%, while TQQQ rose by 68%. At first, this seems all profit and good, but now let’s look at a negative return. From 21 July 2023 to 25 October 2023 Nasdaq drops by 8.5%, while TQQQ drops by 27%. For a usual investor, a loss of 27% is very high.

TQQQ is a very nerve-racking etf. It is only advised to be traded by experienced traders. While if you can adjust big losses for big returns, you are good to trade TQQQ.

Now the question was What’s better? They both are, but they are for different purposes. QQQ is a good long-term low-risk investment. TQQQ can be long-term and short-term but with a good amount of risk. After all, it comes down to the investor does he feel safe losing a lot? or does he prefer to stay steady? and don’t take big risks.