Do Leveraged ETFs Belong in a Long-Term Investment Portfolio?
2026-02-27 07:10:00 ET
The premise sounds awesome. Whatever gains the market is making, you're gaining twice as much, or even more! That's what instruments like the Direxion Daily S&P 500 Bull 2x Shares (NYSEMKT: SPUU) or the Direxion Daily S&P 500 Bull 3x Shares (NYSEMKT: SPXL) do, magnifying the S&P 500 's daily movement by a factor of two, if not three (respectively).
There's a flipside to this upside, however. Just as leveraged exchange-traded funds (ETFs) dramatically increase marketwide gains, they just as dramatically increase marketwide losses. Even for patient investors comfortable riding out bearish storms, these sorts of magnified losses can really get in your head, prompting you to make ill-advised, ill-timed decisions.
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NASDAQ: SPXL
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