Disclaimer: The information in this article is intended for informational purposes only and should not be taken as personal financial advice.
Since its inception in 2010, TQQQ has delivered a massive ~18,200% return! Yes, you read that correctly—an investment of just $1,000 fifteen years ago would now be worth $182,000! These numbers are almost hard to believe, but they highlight the incredible power of leveraged investing during a prolonged bull market.
That said, the journey to the top has been a bumpy one. TQQQ’s amplified nature means that even routine market pullbacks can result in steep losses of 30–40% in a matter of months.
As a long-term investor, I believe TQQQ is one of the best high-risk, high-reward opportunities available today. Personally, I’ve allocated around a quarter of my portfolio to this ETF, and since I began accumulating shares in early 2023, my position is up 150%.
In this article, I’ll break down what makes TQQQ such a compelling yet volatile investment and share key insights for those considering it as part of their long-term strategy.
Long-Term Performance: TQQQ Vs. QQQ
The growth of TQQQ over the past decade completely surpasses the performance of its underlying asset, QQQ. As a leveraged asset, TQQQ is able to compound at a much higher rate leading to long term return rates that far exceed 3X.
From 2010-2025, the overall rates of return have been:
TQQQ: +18,200%
QQQ: +1,100%
While the average annual rates of return have been approximately:
TQQQ: +42% / year
QQQ: +18% / year
This outperformance demonstrates how TQQQ has not just tracked the Nasdaq-100 with 3X leverage but has vastly exceeded expectations, delivering results that even most professional investors struggle to replicate. Its ability to use the power of daily compounding during one of the strongest bull markets in history has made it a standout investment for those willing to embrace its risks.
Simple, Powerful, Risky
What is even more incredible than an 18,200% return is that no complex trading strategy or algorithm is needed to achieve this. Simply holding TQQQ during a prolonged bull market was enough to generate these massive returns.
Attempting to replicate these types of returns through alternative investment strategies, such as picking individual stocks, day trading, or options, often ends poorly for us retail investors. Studies have consistently shown that these high-effort, high-risk approaches frequently underperform the market. In fact, an article from Lanning Financial suggests that ‘average investors underperform the markets, sometimes by as much as 50%.’
What sets TQQQ apart is its simplicity. It allows investors to leverage the steady growth of a low-cost index fund without the need for constant trading or in-depth knowledge of a company’s financials.
However, while TQQQ has demonstrated historic growth, it is not without significant risks. Its amplified exposure to market volatility means that even small downturns can lead to dramatic losses, making it unsuitable for investors without a strong risk tolerance or a deep understanding of its mechanics.
Expect Downturns
Understanding how TQQQ performs during market downturns is crucial for managing your expectations and emotions as an investor. While its long-term growth has been extraordinary, TQQQ’s leveraged nature amplifies both gains and losses, resulting in significant volatility during market corrections.
Since its inception in 2010, TQQQ has experienced eight separate declines of 40% or more in its share price. Some of the most notable examples include:
- The 2020 COVID Crash: TQQQ plummeted a staggering -73% in just two months, mirroring the sharp market panic caused by the global pandemic.
- The 2022 Inflation Scare: Over the course of 12 months, TQQQ declined -82%, as rising interest rates and inflation fears triggered a broader sell-off in growth and tech stocks.
These examples underscore the inherent risk of investing in TQQQ. Moreover, it’s worth noting that TQQQ has yet to weather a recession as severe as the Dot Com Bubble of 2000 or the Global Financial Crisis of 2008. In those scenarios, TQQQ would likely experience even steeper declines—potentially exceeding -90%.
Investors considering TQQQ as a long-term investment should be prepared for such downturns and recognize that these losses, while painful, are part of the high-risk, high-reward nature of leveraged investing.
Volatility Decay
Volatility decay is a key challenge faced by all leveraged ETFs and is often misunderstood by investors. It occurs when a leveraged ETF loses value during volatile markets, even if the underlying asset it follows stays at the same value. This has led many experts to recommend using leveraged ETFs only for short-term strategies. However, this perspective does not tell the full story.
While it’s true that all leveraged ETFs are susceptible to volatility decay in the short term, long-term performance can overcome this decay when the ETF tracks a consistently growing, low-volatility index. TQQQ’s remarkable growth compared to its unleveraged counterpart, QQQ, demonstrates how compounding gains can replace the effects of short-term volatility decay.
The key lies in the nature of the asset being tracked:
- Leveraged ETFs tracking low-volatility, consistently growing indices (like the Nasdaq-100 for TQQQ) tend to perform better over time.
- In contrast, leveraged ETFs tied to high-volatility assets, such as individual stocks or commodities, often struggle to deliver sustainable returns due to frequent value erosion during volatile periods.
It’s important to acknowledge that TQQQ has largely benefited from a historically strong bull market over the past 15 years.
As mentioned previously, it has not yet faced a prolonged, deep recession like the 2000 Dot Com Bubble or the 2008 Financial Crisis, where volatility decay and amplified losses could pose greater challenges.
Who Should Invest In TQQQ?
TQQQ is not for the faint of heart. It is a high-risk, high-reward investment designed for a specific type of investor. If you’re considering adding TQQQ to your portfolio, you should meet the following criteria:
- Discipline and Experience
This means resisting the urge to sell, even if your position is down by 50%, 70%, or even 90%. Historically, TQQQ has recovered from steep losses, but only patient investors who can stomach short-term pain will reap the rewards of long-term compounding. - A Long Time Horizon
TQQQ is best suited for younger investors who have the time to recover from large losses and let the power of compounding work in their favor. If you’re investing for decades rather than years, TQQQ’s exponential growth potential could align with your financial goals. - High Disposable Income
Having a high disposable income is a significant advantage when investing in TQQQ. It allows you to take advantage of market downturns by averaging down on your position, lowering your cost basis, and setting yourself up for greater gains during the next bull market. - Portfolio Diversification
While TQQQ can deliver extraordinary returns, it’s not a one-size-fits-all investment. It’s highly recommended that TQQQ only make up a portion of your portfolio. Balancing it with less volatile investments, such as traditional index funds or bonds, can help mitigate risk and stabilize your overall returns.
Conclusion
Over the past 15 years, TQQQ has delivered an average annual return of +42.6%, making it one of the most extraordinary investments for retail investors. Its simplicity and ability to leverage the compounding growth of a major index have yielded remarkable results without the need for complex strategies.
That said, TQQQ’s amplified volatility demands discipline, patience, and a strong understanding of its risks. It’s not for everyone, but for those who can hold and average down through downturns, TQQQ can be a powerful tool for growth!
As always, diversify your portfolio, respect the risks, and never invest more than you can afford to lose. While TQQQ’s past performance is exceptional, no investment comes with guarantees.
Happy Investing!
