Investing in tech stocks is not for the faint of heart. The tech-heavy Nasdaq-100 index has delivered more than 1,000% gains for investors in the past 15 years. But buying shares of the world’s most innovative companies also brings risk, volatility, and occasional big short-term declines.
The ProShares Ultra Pro QQQ (TQQQ +3.83%) offers investors a way to get even bigger returns from the Nasdaq-100 — but with added risk. This is a leveraged ETF that uses borrowed money to buy stocks. Its investment goal is to deliver three times the daily performance of the Nasdaq-100.
When tech stocks have a good day, this ETF can put bigger numbers in your brokerage account. But if the Nasdaq-100 index declines or a tech bubble bursts, the power of leverage can hurt your investment returns.
Let’s take a closer look at TQQQ and see which investors should buy it — and who should stay away.
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