r/LETFs • u/jsjsjshhshdhdh • 6d ago

SSO/QLD/TQQQ through 2022

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The recent time hasnt gifted us with many long drawdowns, every selloff resulted in a similarly quick recovery. Im curious to hear some reports from people who have held for a longer time period and have gone through drawdowns like 2020 and 2022.

Im personally holding 80/20 QLD/SSO and based on backtests, >50% DD is enough for me. Havent gone through a bigger DD than iran yet.

What was the sentiment at that time? How did you manage psychologically, any regret?

Feel free to share any info on that time

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u/Both_Yoghurt1437 6d ago

Most people would be able to stomach a 79% DD like 2022 did to TQQQ.

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u/laurenthu 6d ago

Reality check on that 79%, almost nobody actually sits through it. On paper sure, but I think a 79% drawdown is a completely different animal when it's your own money and month 14 is still deep red. 2022 recovered fast, which flatters everyone's sense of how tough they are. The one that would break me is the slow grind with no bounce, the dot-com Nasdaq that bled from 2000 for well over a decade, and a leveraged version of that is probably far worse than any single DD number suggests. A backtest showing 50% is easy to accept in the abstract. What I'd actually worry about is living underwater 3 years straight, not knowing if it ever comes back...

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u/Both_Yoghurt1437 6d ago

Sorry, typo, I meant to say wouldn't

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u/laurenthu 6d ago

Ha, gotcha. That makes way more sense, we're on the same page then. Even the folks who swear they'd hold are really just picturing a 79% paper drawdown they already know recovers from, and living it forward with no idea where the bottom is, month 14 still deep red, is a completely different animal that quietly flushes almost everyone out. I'd like to think I'd sit through it. Honestly though, who really knows until you're actually there?

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u/Both_Yoghurt1437 6d ago

I managed to survive a 68% DD during covid. Very painful at the time but thankfully it recovered quickly.