I have been enamored with the idea of making a bunch of money by buying a major dip for a while now. However unless I have cash on hand to buy the dip that can’t really be done and to have cash on hand I’d have to risk missing out on returns now which may lead to less returns overall if a major dip doesn’t come soon. Big believer in the whole more money is lost hedging for a downturn than in the actual downturn.
As an alternative to holding cash Iv been exploring holding leveraged funds during a downturn. Looking at charts of TQQQ it has had some enormous gains overall. Ik Ik it’s been an incredible bull run and that might not continue but not considering buying at highs and holding forever. Instead I was thinking something like at 10% draw back of QQQ shifting contributions to TQQQ which would make up a really small portion of my portfolio then every couple weeks re evaluate. If it continues to drop keep contributing to it. At say a 30% drop start shifting holdings to TQQQ and so on buying all the way down.
As an exit strategy I would sell and put it back to normal allocations of S&P500 international, etc. once market returns to a new ATH or maybe just hold 1 more year. I’m aware of volatility decay and don’t want to go through 2 pullbacks that could lead to lower returns than the non leveraged index.
I see a ton about never holding these products for a multi year period but this seems like a solid idea with a multi decade time horizon?