tqqq 和 qqq 联合就是力量？ 大侠们请指正 :)

tqqq 和 qqq 联合就是力量？

 

I am thinking about the following idea.  I have not started yet, but would like to start in the near future.  This idea seems to be better than methods using the 50:50 ratio or 70:30 ratio, because the total absolute dollar amount in tqqq can be limited or capped to one’s comfort level.  If you have, say, $2 m in the market, 50:50 ratio would mean $1 m in tqqq, which may not be prudent.  Tqqq can be great in a rising market, but can theoretically go to 0 in a major crash.

 

Using the following method, I can cap my tqqq to a comfortable level.  The following example uses $100k in tqqq.  If you prefer $200k in tqqq, just do 2x to the following calculation.  If you prefer $300k in tqqq, then do 3x to the following calculation.  This will not change the % of return below. 

 

The following is just an illustrative example; I have not started this method yet.  I plan to start in the near future.  This is just a hypothetical back testing for the past year and a half to comare three different methods.

 

I. Case Study on Feb. 2020 to July 2021, Example (A):

 

Put $100k into tqqq on 2/14/2020.  Note that this example starts with a bad timing, at the market top right before the crash.  Therefore, this example takes into account unexpected and nasty crash.  This is not a best case scenario that is too good to be true.

 

Tqqq dropped from $57.27/share (Feb. 14, 2020) $17.76/share (March 20, 2020), approximately 70% drop.

 

In this method, every time tqqq drops by 20%, I add another $20k into it.  If the drop is less than 20%, then do nothing.

 

Start with $100k tqqq on Feb. 14, 2020:

 

Tqqq index drops 20% to $45.82/share, I add $20k into my tqqq.  My tqqq maintains at $100k.

Tqqq index drops another 20% to $36.65/share, I add $20k into my tqqq.  My tqqq maintains at $100k.

Tqqq index drops another 20% to $29.32/share, I add $20k into my tqqq.  My tqqq maintains at $100k.

Tqqq index drops another 20% to $23.46/share, I add $20k into my tqqq.  My tqqq maintains at $100k.

Tqqq index drops another 20% to $18.77/share, I add $20k into my tqqq.  My tqqq maintains at $100k.

 

Money out of my pocket:

Initial $100k + additions $100k = $200k.

 

Then tqqq increases from $17.76/share to $130/share (as of 7/12/2021).

 

Every time tqqq increases by 20%, sell $20k and put it into qqq.

 

Tqqq index increases 20% to $21.31, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $25.57, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $30.69, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $36.83, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $44.19, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $53.03, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $63.63, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $76.36, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $91.64, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $21.31, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $109.96, I sell $20k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 20% to $131.95, I sell $20k of my tqqq.  My tqqq maintains $100k.

 

The money that tqqq spits into qqq has been growing.  Net growth in qqq from DCA from the spit-out (based on curves available on Google): approximately $86k.

 

Total value as of 7/12/2021: tqqq $100k + qqq (240k + 86k) = about $426k.

 

Return: (426-200)/200 = about 113%.

 

 

II. Case Study on Feb. 2020 to July 2021, Example (B):

 

In this example, I sell tqqq only after it doubles.  Everything else is the same as Example A.

 

First, as in Example (A), start with the same $100k in tqqq at market top Feb. 14, 2020.

 

Tqqq index drops 20% to $45.82/share, I add $20k into my tqqq.  My tqqq maintains $100k.

Tqqq index drops another 20% to $36.65/share, I add $20k into my tqqq.  My tqqq maintains $100k.

Tqqq index drops another 20% to $29.32/share, I add $20k into my tqqq.  My tqqq maintains $100k.

Tqqq index drops another 20% to $23.46/share, I add $20k into my tqqq.  My tqqq maintains $100k.

Tqqq index drops another 20% to $18.77/share, I add $20k into my tqqq.  My tqqq maintains $100k.

 

Money out of my pocket:

Initial $100k + additions $100k = $200k.

 

Then tqqq increases from $17.76/share to $130/share (as of 7/12/2021).

 

Every time tqqq increases by 100% (doubles), sell $100k and put it into qqq.  This maintains $100k in tqqq.

 

Tqqq index increases 100% (doubles) to $35.52/share, I sell $100k of my tqqq.  My tqqq maintains $100k.

Tqqq index increases 100% (doubles) to $71.04/share, I sell $100k of my tqqq.  My tqqq maintains $100k.

 

Currently as of 7/12/2021, Tqqq index is at about $130/share.  My tqqq would be at $182k.

 

By selling only after tqqq doubles, there is less action needed.

 

Net growth from spitting and investing DCA into qqq along the way: about $88k net increase, based on curves estimated at Google.

 

Total value: tqqq 182k + qqq 200k + 88k = about $470k.

 

Return: (470-200)/200 = about 135%.

 

 

III. Control (Example C):

 

My control is the simple qqq method, without using tqqq.  Put the same $100k into qqq Feb. 14, 2020 ($234.64/share).  It decreased to $170.70/share on 3/20/2020.

 

qqq index drops 7% to $227.60, I add $20k into my qqq. 

qqq index drops 7% to $211.67, I add $20k into my qqq.

qqq index drops 7% to $196.85, I add $20k into my qqq.

qqq index drops 7% to $183.07, I add $20k into my qqq.

qqq index drops 7% to $170.26, I add $20k into my qqq.

Total value at the market bottom is about $160k due to market crash, based on estimate using curves at Google.

 

Total value as of 7/12/2021, about double from the bottom: $320k.

 

Money out of my pocket:

Initial $100k + additions $100k = $200k.

 

Return: (320-200)/200 = 60%.

 

 

IV. Conclusions:

 

[1]. Compared to simply using qqq, it is better to combine qqq with tqqq.  Combination is creation.

 

[2]. The rate of return can be doubled (60% vs. 135%) with very little extra work. 

 

[3]. (B) is the best.  When tqqq decrease by 20%, add more money into tqqq to maintain at $100k.  When tqqq doubles, sell $100k and put it into qqq, and maintain tqqq at $100k.

 

I use $100k as an example.  I may gradually accumulate my tqqq to cap at $500k.  It can be $200k, or $100k, for different people.  This will not change the rate of return (%).

 

Any feedback?  Experts in this group, feel free to comment.

 

Best regards,

 

David Meng

Author of book at Amazon “The Intelligent Small Investor”.