Are Leveraged ETFs Smart Tools or Speculative Bets?
2026-02-18 23:05:00 ET
Leveraged exchange-traded funds (ETFs) initially sound like cheat codes to double your exposure to a publicly traded company without taking out margin. However, these same funds can decimate your portfolio, and it gets worse the longer you hold on to them. The mechanics of these funds do not warrant long-term positions in your portfolio since they are different from actual margin trading.
It's much better to buy and hold individual stocks for the long run instead of trying to make flashy plays with margin and leveraged ETFs . These are some of the reasons leveraged ETFs are nothing more than speculative bets, even though they may look like smart tools to investors who don't know the intricacies of these types of funds.
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