To The Moon

🌟🌟🌟Sell In May And Go Away has started early this year in April with the US markets down last week.  The worst hit was Big Tech with all members of the Magnificent 7 down for the week.

$SPDR S&P 500 ETF Trust(SPY)$  has dropped 3.9% for the week while $Invesco QQQ Trust(QQQ)$  was also down 6%.

Against this backdrop of geopolitical conflicts and higher for longer interest rates by the Feds, I bought $Nasdaq100 Bear 3X ETF(SQQQ)$  to hedge against the falling US markets.  It is like a little  short term insurance to protect my portfolio.

SQQQ provides - 3x or negative 3 times inverse exposure to a modified market cap weighted index of 100 of the largest non financial firms listed on Nasdaq.

SQQQ is an Inverse ETF on the Nasdaq 100 to be used when the markets sentiments were deemed to be negative.

To provide this exposure, SQQQ uses swaps on QQQ ETF, swaps on the index itself and the futures.  This ETF is designed to provide exposure on a daily basis and is not suitable for long term hold.  This is due to the compounding nature of SQQQ.

The expense ratio is 0.95%.  Assets Under Management is USD 3.15 billion.  SQQQ has a current  dividend yield of 8% and is paid every 6 months.

Performance wise SQQQ is up 6.3% on Friday and in the past 5 days it has jumped 20.9%.  It is down 9% year todate and in 2023 it has dropped 58%.

In contrast QQQ was down 2% on Friday and in the past 5 days it has dropped 6.2%.  However it is up 3% year todate.  In 2023, QQQ is up 31%.

I find that using SQQQ is a lot easier than trading options which require expertise and indepth knowledge.  I do not have to worry about margin call on options trading and losing more money than I can afford.  In SQQQ, my loss is capped to the original amount that I invest in. 

I am currently up 5% in SQQQ and is one of few trades that are in the green currently.  However I am a long term investor and believe when the markets are down, it is time to go bargain hunting for quality stocks such as Nvidia which was down 13% last week.  

As Warren Buffett likes to say Buy Wonderful Companies at Fair Price and his favourite holding period is Forever. 

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