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Financial theory says that if you want to maximize return and will accept more risk, you should leverage the market portfolio, rather than taking undiversified

Financial theory says that if you want to maximize return and will accept more risk, you should leverage the market portfolio, rather than taking undiversified single-stock risk. There exist 3x leveraged S&P 500 ETFs such as SPXL, which Portfolio Visualizer says has had a CAGR of 32% from Jan 2009 to Jan 2021, with a high volatility of 46.21%. You can get even more leverage by going long S&P 500 futures directly.

Bluestein 6y ago
A lot of investor education is needed ...
SavageBeast 6y ago
Not even to mention using options to play S&P 500 futures. If thats a little rich for you theres also mini version of that and the Nasdaq 100 (ES, NQ respectively). The thought of a well known and capped loss amount on a long call/put is very attractive and perfectly suited for this kind of gambling. If the mini version is still too rich for you don't despair - theres MES and MNQ which are Micro versions of the Mini versions. The option activity on those isn't so great but you can afford to trade the underlying FUT without going broke the very first mistake you make. Put another way - you can lever up and make a lot of money off a small move -OR- you can try to make a large amount of money on a large move. One of these 2 situations is relatively common and the other is a moonshot.
sharemywin 6y ago
If you want to beat the market and you have more than 10 years to wait. put 80% of your money in spy. And 10-30% in SPXL. Rebalance monthly. Then if the market tanks more than 5% put another 10-20% more in to SPXL. If the market hits it's previous high rebalance back to original. If the market shits more than 30% go all in. Once the market reaches it's previous high rebalance to original levels. Btw, this isn't sound financial advice so your nuts if you listen to me. The key is you've got 80% of your money in the S&P500 and your only playing around with a small amount of it.
- sharemywin 6y ago
  you could also use TECL or TQQQ. there's couple others. It would be cool to program that into a bot and leave it alone for a while.

Bluestein 6y ago

A lot of investor education is needed ...

SavageBeast 6y ago

Not even to mention using options to play S&P 500 futures. If thats a little rich for you theres also mini version of that and the Nasdaq 100 (ES, NQ respectively). The thought of a well known and capped loss amount on a long call/put is very attractive and perfectly suited for this kind of gambling. If the mini version is still too rich for you don't despair - theres MES and MNQ which are Micro versions of the Mini versions. The option activity on those isn't so great but you can afford to trade the underlying FUT without going broke the very first mistake you make. Put another way - you can lever up and make a lot of money off a small move -OR- you can try to make a large amount of money on a large move. One of these 2 situations is relatively common and the other is a moonshot.

sharemywin 6y ago

If you want to beat the market and you have more than 10 years to wait. put 80% of your money in spy. And 10-30% in SPXL. Rebalance monthly. Then if the market tanks more than 5% put another 10-20% more in to SPXL. If the market hits it's previous high rebalance back to original. If the market shits more than 30% go all in. Once the market reaches it's previous high rebalance to original levels. Btw, this isn't sound financial advice so your nuts if you listen to me. The key is you've got 80% of your money in the S&P500 and your only playing around with a small amount of it.

sharemywin 6y ago
you could also use TECL or TQQQ. there's couple others. It would be cool to program that into a bot and leave it alone for a while.