These days, it truly feels like the golden age of leveraged ETFs.
Investors who once found 2x leverage too tame that,
are now slamming the pedal with 3x leveraged ETFs without hesitation!
One of the biggest draws of leveraged ETFs is how quickly they can move—
it’s not uncommon to see gains of tens of percent overnight.
And lately, SOXL and TECL, the 3x leveraged ETFs in the semiconductor sector,
have been grabbing a lot of attention.
But here’s the thing.
As someone who’s survived the battlefield that is the stock market for quite a while,
let me share a bit of my experience with you.
To put it simply: the key to making money is to do the exact opposite of what the "retail investors" are doing!
There are countless reasons to act contrary to the retail crowd,
but let me give you an easy one.
The small amounts of money they pool together are just a drop in the ocean
in the grand scheme of the stock market.
And the tools available to retail investors?
They’ve basically got two: the buy button and the sell button.
Meanwhile, big players—investment firms, insurance companies, pension funds,
hedge funds, and more—are managing billions, even trillions.
To them, retail investors’ money is just pocket change, ripe for the taking.
All it takes is a couple of negative headlines,
and a few retail investors, already on edge, will panic and hit the sell button as soon as the market opens.
Others, trying to flip their way to quick riches by buying on margin,
will eventually cave and sell in hopes of buying back in at a lower price.
As retail investors’ reactions pile up,
their hard-earned money can evaporate with a 20% loss in no time.
Soon, they’re regretting not using that money for a trip to Hawaii,
and swearing they’ll never touch the stock market again.
This is when you need to stick to your strategy.
Set your own valuation, and when the price hits that target,
have the courage to press the buy button with a lion’s heart.
In my experience, when I’ve had that kind of conviction,
the results often seemed like even the heavens were on my side,
rewarding me with solid returns.
So, don’t just jump in because others are buying.
Make your own value judgment before pulling the trigger!
Wishing you all success and good health!