I wanted to do a come back on that discussion... because I wanted to add some controversy to it.
So they say TQQQ is for day traders or swing traders, but not for long investors. They say that's because of the decay / volatility drag / leverage / whatever you call it.
Then, they show a graph like this, which I've reproduced. That's the graph of IXIC for 5040 days starting on February 1, 2000, near the peak before the crash. 5040 trading days is about 20 years, which gets us to February 11, 2020.
The stock price is IXIC but starting on a basis of 1$. The main graph shows in orange the total return for the money invested on February 1, 2000. The yellow line shows the total return for a 3X daily IXIC. The gray line is simply the "direct" line if daily returns would've been the same every single day. The dotted blue line is the difference in percent between the yellow line and the orange line.
Yup, that's true, you've lost most of the money you invested on that specific day (February 1, 2000). That's true, if you currently have 1 000 000$ in your whole account and you plan to buy a 3X daily, that may not be a good move. 5040 days later, the IXIC is at +140% while the 3X daily IXIC is at -65%.
But what if you simply started investing on that date (February 1, 2000)? And then, since you believe tech will always bounce back, you just kept the cash flow no matter what? Let's say you invested 1000$ on February 1, 2000 and then another 1000$ every 20 trading days (about every month). Note that in this case, the main graph is the total value of the portfolio in dollars.
Oh, that's a different picture! You've invested a total of 253 000$ over 20 years and that money would be worth 900 000$ for IXIC while it would be worth 4 220 000$ for the 3X daily IXIC. Moreover, it was mostly even with IXIC during the 14 first years, then it started beating it.
Ok, one last scenario. What if you invested a big chunk of money (200 000$) on February 1, 2000, and then you invested 1000$ every 20 trading days?
Well, you've lost most of that 200 000$ on the 3X daily IXIC, that's for sure. You've invested a total of 452 000$ over 20 years (200 000$ as an initial investment, then 252 000$ distributed evenly). That money would be worth 1 380 000$ for IXIC and 4 290 000$ for the 3X daily IXIC. By comparing the previous scenario, one can note that the initial investment 200 000$ was mostly lost since the overall return is barely any different. In fact, the difference is 70 000$, which fits with the -65% applied to 200 000$. Yet, the overall value of that 3X daily IXIC portfolio is still more than 3x the final value of IXIC. It took 14 years to break even with IXIC before beating it, though.
This is just an observation, not a financial advice. Past results does not guarantee future results. My personal conclusions? Well, I've also made many 100% fictive scenarios over 20 years and over the long term there can be many cases where IXIC will beat the 3X daily IXIC, but if you have a realistic goal, you may end up selling at huge profit a portfolio using a 3X daily before it collapses again. But one must be prepared to be underwater for many years. Does that mean it's a good strategy? You decide. I'm not saying that I recommend it. In some sense, buying a 3X daily is not worst than buying a high beta stock. For instance, DOO.TO has a high beta and dropped -75% during the COVID. But a high beta also means a quick come back for a growth stock. I bought it in mid-April and doubled my money by the end of May, 6 weeks later.