The Lightbulb Moment
I had a sudden thought.
If someone wanted to become the highest-earning portfolio on Dub, they would load up on the riskiest, highest-return 3x stocks right after a major pullback.
At the time, “Tariff Liberation Day” was creating that exact setup.
“Big opportunity”, I thought
So I went ahead and created the riskiest highest return plan I could think of.
And it worked, I reached the highest monthly return on the copy trading platform Dub—off and on—for about a month.
My Decision-Making Process
I already had some exposure to leveraged ETFs. (ETF just means a collection of stocks.)
These came from options trading on FAS (3x financial sector) and TNA (3x small-cap). In addition, I held inverse positions like DRIP (3x inverse oil).
I don’t typically use AI for direct trading decisions. However, it works extremely well for research. For example, I used ChatGPT to identify other strong 3x contenders. So, I added:
- CURE for healthcare exposure.
- SOXL for semiconductors, which were getting hammered at the time.
- TECL for broader tech stocks, because diversification is key.
The Portfolio Evolution
As stock prices climbed, I move into more conservative positions. For instance, I added USMV (low volatility) and JEPI (covered call income).
Meanwhile, when markets get overbought, I go for contrarian plays. This included NUGT (2x gold miners) and maintaining my DRIP inverse oil position.
I still go back on forth on this. I could have earned more if I did those plays later.
Lessons Learned
You can’t predict the market. No matter how confident you feel, there will be surprises. We hear this often but it is true.
Trying to outguess the counter-cyclical game cost me a fair bit of upside. Therefore, I am reconsidering this approach.
For now, with markets still elevated, I may wait for the next major pullback before committing to a similar strategy again.
Key Takeaways
- Timing matters: Load up on high risk plays after major selloffs.
- Diversification within risk: Spread positions across sectors, even with leveraged ETFs.
- AI as a research tool: Great for spotting opportunities, but not for direct trading signals.
- Risk management: Take profits and reduce concentration when the market turns.
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