When the Nasdaq 100 index is experiencing a downturn, investors may wonder which ETF, TQQQ or SQQQ, is the better option to buy. TQQQ is a leveraged ETF that aims to provide triple the daily returns of the Nasdaq 100 index, while SQQQ is an inverse leveraged ETF that seeks to provide triple the inverse daily returns of the same index.
In times of falling Nasdaq 100 index, TQQQ may seem like the more attractive option for investors looking to capitalize on potential gains. However, it is important to note that leveraged ETFs like TQQQ can be risky and may not always perform as expected, especially in volatile market conditions.
On the other hand, SQQQ can be a valuable tool for investors looking to hedge against a declining Nasdaq 100 index. By providing inverse exposure to the index, SQQQ can help mitigate losses in a falling market.
Ultimately, the decision between TQQQ and SQQQ will depend on an investor’s risk tolerance and investment goals. It is crucial to carefully consider the potential risks and rewards of each ETF before making a decision. Consulting with a financial advisor may also be beneficial in navigating the complexities of leveraged and inverse ETFs during market downturns.