TQQQ up over 44% YTD! What will happen if you hold ETF for the long term?
Entering 2023, the rebound trend of U.S. stocks is gradually showing. As the pace of interest rate hikes slows down, technology stocks & Chinese concept stocks have rebounded, driving the Nasdaq and S&P 500 to increase by 12.62% and 2.84% respectively^.
If you are optimistic about technology stocks but afraid of chasing higher, then you can try to invest in ETFs at low cost! You can enjoy dividends following the market’s rise, without worrying that the risk of the stock market is too high to bear.
ETFs can be great building blocks for long-term investors! For users who are investing in ETFs for the first time, a S$10* cash coupon is up for grabs today!![]()
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>>ETFs: Build Your Retirement Portfolio
^Source: Moomoo. Data as of 3/24/2023.
Is ETF a good investment?
ETF is an investment tool that tracks the performance of an existing market or a group of markets. ETF allows you to buy multiple stocks, bonds and commodities at one time, which is suitable for diversification.
If you are bullish on a particular sector or the general market trend, you can choose the corresponding ETF to get on board. As long as the sector continues to grow, the ETF might rise in the long run.
Follow Buffett to invest in index ETF
->Index ETFs
The performance of ETFs is linked to the market indices they track. Index ETFs, track the broader market and work better as a long-term value investment.
Buffett has long been a proponent of the index ETF investing as it offers a diversified approach. He suggested investing in a low-cost index fund and have for a long period.
In the past ten years, the ETFs tracking the US stock index have shown good growth. $Invesco QQQ Trust(QQQ.US$ has increased by 412%, $SPDR S&P 500 ETF(SPY.US$ has increased by 204%, and $Vanguard S&P 500 ETF(VOO.US$ has increased by 207%^.
^Source: Moomoo. Data from March 2013- March 2023.
Make two-way profit in a volatile market
ETF supports leverage and two-way operation of ups and downs, and can potentially also be used to achieve the effect of hedging or doubling income. Leveraged and inverse ETFs are derivatives that track indices.
->Leveraged ETF
If you are optimistic about a market or asset class trend, you may consider leveraged ETFs to potentially earn multiples of the underlying investment's return.
For example, as the US stock market rebounds in 2023， $ProShares UltraPro QQQ ETF(TQQQ.US$ has risen 48% year-to-date, which is three times that of QQQ. $Proshares Ultra QQQ ETF(QLD.US$ has risen 32.1% and $ProShares UltraPro S&P500 ETF(UPRO.US$ has risen 4.9%^.
^Source: Moomoo. Data as of 3/24/2023.
->Inverse ETF
Inverse ETF seeks daily investment results corresponding to times the inverse (–1X, –2X, or even –3X) of the underlying index's daily performance, excluding fees and expenses. If bearish market sentiment soars and you think the market will continue to fall, you may consider inverse ETFs for hedging.
Especially during bear markets, the advantages of inverse ETFs are very obvious.
From April to June 2022, the Nasdaq 100 fell by 22.44%. Some smart investors had used inverse ETFs to protect themselves against the downside, and they can also make good money.
For example, the $ProShares Short QQQ(PSQ.US$ they invested in, which backtracked the Nasdaq 100, rose by 24.35%, while the triple leveraged $ProShares UltraPro Short QQQ ETF(SQQQ.US$ rose by 74.75%!
^Source: Moomoo. Data from April 2022- June 2022.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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NgKennykk : Nice
102804426-Vijay : Nice