No. of Recommendations: 4
There is no doubt about the tracking error computations as well as the fees deducted. However there is still a pyramiding effect from the leverage application when markets are trending up.

This article from Seeking Alpha gives some interesting information about the longer term holds and returns. I have not done the calcs to be exact on the numbers but consider that if the 3X ticker only gives 2.5X return, compounding for several years can leave an ending balance many multiples higher than the B&H balance. The article has some interesting links to long term research papers and some interesting graphs of final returns.

The Trading Strategy That Beat The S&P 500 By 16+ Percentage Points Per Year Since 1928
https://seekingalpha.com/article/4226165-trading-strategy-be...

With that title, the article attracted many comments, some are worthwhile to read. The author has several other interesting reads published at Seeking Alpha.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.