Long Run Wealth Advisors LLC recently made a $530,000 move into ProShares UltraPro QQQ (TQQQ), snapping up 6,391 shares in the second quarter. That's according to their latest SEC filing. Now, half a million isn't exactly pocket change, but in the grand scheme of institutional investing, it's a relatively small position. What is interesting is the broader trend: Howard Capital Management Inc. really upped its stake, adding a staggering 4,440,578 shares, bringing their total to $404,067,000. That's a 1,071% increase. Long Run Wealth Advisors LLC Invests $530,000 in ProShares UltraPro QQQ $TQQQ
TQQQ isn't your vanilla index fund. It's a leveraged ETF, aiming for three times the daily performance of the Nasdaq-100. Think of it like this: if the Nasdaq jumps 1% on any given day, TQQQ should, in theory, rise about 3%. The flip side, of course, is that losses are magnified too. A 1% Nasdaq dip translates to roughly a 3% hit for TQQQ.
This daily reset is crucial. It means TQQQ isn't designed for buy-and-hold strategies. As the documentation states, triple the daily performance isn't the same as triple the long-term performance. The math gets complex (involving volatility decay and compounding), but the bottom line is this: holding TQQQ for extended periods can produce results that deviate wildly from simply tripling the Nasdaq-100's overall return.
The expense ratio is also worth a look. At 0.82%, it’s on the higher side for an index fund but typical for leveraged ETFs. You're paying for that behind-the-scenes wizardry that creates the 3x effect. Is it worth it? That depends entirely on your risk tolerance and investment horizon.
Let's glance at historical performance. Over the past five years, the Nasdaq-100 generated an annualized return of about 17.58%. TQQQ, during that same period, produced roughly 26.88%. It amplified the index's return, but it didn't triple it (as a pure, naive calculation might suggest). And this is the part I find genuinely puzzling. If TQQQ is designed to deliver 3x the daily returns, why isn't the 5 year return closer to 52%?
The max drawdown (the biggest peak-to-trough decline) tells a starker story. TQQQ's max drawdown over five years was a brutal -81.8%. SPXL, which aims to triple the daily returns of the S&P 500, had a max drawdown of -63.8%. TQQQ is not for the faint of heart.
One crucial point often overlooked: TQQQ recently announced a 2-for-1 stock split, scheduled for November 20th. This doesn't fundamentally change the value of your investment (you'll have twice as many shares, each worth half as much), but it can make the stock more accessible to smaller investors.
Also, the dividend yield is minimal: around 0.69%. Don't buy TQQQ for income; it's a growth play (albeit a highly speculative one).
The narrative science technology generated report states that ProShares UltraPro QQQ currently has a Hold rating among analysts, but top-rated analysts believe these five stocks are better buys. I've looked at hundreds of these automated reports, and this particular disclaimer is unusual. It's a fairly blatant advertisement for other products.
So, is TQQQ a smart bet or a leveraged gamble? The answer, as always, is "it depends." It depends on your risk tolerance, your investment timeline, and your understanding of the underlying mechanics of leveraged ETFs. It's not a set-it-and-forget-it investment. It requires active monitoring and a willingness to stomach significant volatility. The institutional interest, particularly the massive increase from Howard Capital Management, suggests some sophisticated players see opportunity here. But remember, even the "smart money" can be wrong (and often is).
The bottom line? TQQQ is a tool, not a magic bullet. It can amplify gains, but it can also magnify losses. Treat it with respect, understand its limitations, and don't bet the farm.
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