TQQQ: How to Buy and Why It Matters

Alright folks, buckle up, because we're about to dive into the thrilling, slightly terrifying, and ultimately exhilarating world of leveraged ETFs, specifically the ProShares UltraPro QQQ (TQQQ). Now, I know what some of you are thinking: "Leveraged? That sounds risky!" And you're not wrong. But risk, my friends, is often the price of admission to extraordinary returns.

Let's break it down. The TQQQ isn't your grandpa's index fund. It's designed to deliver three times the daily performance of the Nasdaq-100. Think of it like strapping a rocket booster to a already fast car. The Nasdaq-100, packed with tech giants like Nvidia, Microsoft, and Apple, has been a performance beast, racking up a 21% annualized return over the past five years. And TQQQ? It cranked out a blistering 35% during that same period.

But here's the catch, and it's a big one: leverage works both ways. If the Nasdaq-100 has a bad day, TQQQ's decline is going to be three times as painful. It’s like a double-edged sword—magnifying gains and losses. It's not for the faint of heart, and definitely not something you should be throwing your life savings into without doing your homework.

The Allure of Amplified Returns

Now, why would anyone even consider a leveraged ETF? Well, the returns, as we've seen, can be downright spectacular. Imagine you're a tech enthusiast, convinced that the companies driving the Nasdaq-100 are poised for continued growth. TQQQ offers a way to amplify those potential gains. It’s like betting on the future with a turbocharger.

Consider this: Since its inception in 2010, TQQQ has delivered an annualized return of over 42%. Now, that's a number that can make even the most seasoned investor sit up and take notice. But remember, past performance is never a guarantee of future results. The market can be a fickle beast, and what goes up can just as easily come crashing down.

One thing that really excites me about TQQQ is what it represents: a democratization of sophisticated investment strategies. Not long ago, leverage was something only hedge funds and institutional investors had access to. Now, with ETFs like TQQQ, individual investors can participate, albeit with a heightened level of risk. How to Buy ProShares UltraPro QQQ (TQQQ) - The Motley Fool

The ETF also pays a dividend, passing through income from the stocks in the Nasdaq-100.

It's worth noting that TQQQ uses derivative securities to create leverage. This is where things get a bit complex – in simpler terms, it uses financial instruments to amplify its exposure to the Nasdaq-100. It's like using mirrors to focus sunlight – it can create intense heat, but it also requires careful management.

Of course, there are costs involved. The gross expense ratio is 0.82%, which means $8.20 per $1,000 in fund assets. It’s a price you pay for the potential of those amplified returns. But let’s be honest, that's a small price to pay if you believe in the long-term growth of the tech sector.

And what about the current situation? As of November 3, 2025, TQQQ is trading at $105.78, down a little over 1% on the day. But one day doesn't make a trend. It's the long-term picture that matters.

This is the kind of thing that reminds me why I got into this field in the first place. When I first started researching ETFs, I was skeptical. Now, I see them as powerful tools that, when used responsibly, can help investors achieve their financial goals.

The Future is Leveraged (Responsibly)

So, what does all this mean for the future? I believe that leveraged ETFs like TQQQ are here to stay. They represent a new frontier in investing, a way for individuals to participate in the potential upside of the market with greater intensity. But with great power comes great responsibility. It’s crucial to understand the risks involved and to invest accordingly. Don't gamble your future. Instead, make informed decisions, manage your risk, and embrace the potential that leveraged ETFs offer.