How does SQQQ work? Here's why it can be a great addition to your portfolio.
Holding SQQQ is akin to shorting the Nasdaq-100 Index with leverage. SQQQ aims to capitalize on declines in the Nasdaq-100 by providing three times (3x) inverse exposure to its daily performance. However, SQQQ is subject to something called volatility drag, which means it's not suitable as a long-term holding. At alphaAI, we use SQQQ to help hedge your portfolio against and, in some cases, profit from short-term market pullbacks.
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How Does SQQQ Work? 4 Key Characteristics
SQQQ is not suitable as a long-term investment. At alphaAI, we use SQQQ to help hedge your portfolio against and, in some cases, profit from short-term market pullbacks.
Inverse Performance
If the Nasdaq-100 falls by 1% on the day, SQQQ is designed to rise by 3%. With alphaAI you can automatically take advantage of this inverse relationship to strategically hedge your portfolio in weak market conditions.
Daily Resets
SQQQ resets its leverage daily, aiming to match the inverse of the Nasdaq-100’s daily performance rather than its long-term performance. Our model is designed to read and adapt to this.
High Risk and Volatility
Due to its leveraged nature, SQQQ is highly volatile and carries a higher level of risk. At alphaAI, we strategically trade small amounts of SQQQ to help keep your portfolio's risk level within your expected range.
Best for Short-Term Hedging
Due to its daily reset feature, SQQQ is not suitable as long-term holding. At alphaAI, we use SQQQ to help hedge your portfolio against and, in some cases, profit from short-term market pullbacks.
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You Can Trade SQQQ With alphaAI in 3 Steps
We create a strategy that fits your risk appetite and unique investment profile with the goal of keeping your portfolio's risk levels within your expected range. We use SQQQ to help hedge your portfolio against and, in some cases, profit from market declines. Here's how it works:
Tell Us About Your Investment Preferences: Answer a few easy questions to help us understand what your risk appetite is and determine your investor profile.
An Investment Strategy Built For You: Based on your investor profile, we create a personalized strategy just for you. Most strategies strategically use SQQQ to help hedge the downside.
Automate Your Portfolio: Our technology is built to handle everything for you. By analyzing current market conditions, our platform will understand when to allocate some of your holdings to SQQQ, and when not to.
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At alphaAI, every strategy has four modes: Surge, Steady, Cautious, and Defense. Our Investment AI will automatically switch between modes based on market conditions.
The idea is simple: When the market looks good, we invest more to help you earn more. When the market seems risky, we invest less to help protect your money.
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At the core of our industry-leading AI system is a team of predictive machine learning models. These models are trained on decades of data from more than 10,000 global stocks, analyzing over 10 billion data points on average. Each model is built for a specific purpose, and together they work as a team to make smarter trading decisions.
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At its core, AI is simply machine learning (ML), which is a branch of math that uses models to find and learn from patterns in data. We use these predictive models alongside a clear, rules-based system to make trades and manage risk, all tailored to your unique investor profile. To add an extra layer of protection, we’ve built in multiple safety protocols to ensure every action stays within strict guidelines.
So, there’s no need to worry – AI isn’t sentient, and it can’t make its own decisions. It’s just a tool we use to process data and generate smart, reliable investment strategies.
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At alphaAI, we don’t believe in the traditional management fee model. Why should your costs go up as your assets increase?
We charge a single, flat subscription fee. This is the only way we make money. We do not charge account opening fees, minimum account fees, withdrawal fees, or account closing fees.
At alphaAI, our mission is to make sophisticated investment strategies accessible to everyone! We pride ourselves in our affordable and transparent pricing.
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How is alphaAI different from other roboadvisors?
alphaAI is the only roboadvisor that adjusts your portfolio to the markets in real-time. Other roboadvisors use a purely passive investment approach, which leaves you unable to take advantage of market trends.
At alphaAI, we use responsive investment strategies to manage your risk. The idea is simple: When the market looks good, we invest more to help you earn more. When the market seems risky, we invest less to help protect your money.
What is alphaAI’s investment philosophy? How do you control risk and drawdowns?
Our goal is simple: deliver better risk-adjusted returns than the market.
Our AI system adjusts your strategy to your unique investor profile and risk tolerance. We adapt your portfolio’s risk level to the markets in real time, helping keep your portfolio’s volatility and drawdowns within your defined acceptable range.
Why does alphaAI focus on leveraged ETFs? Aren’t they highly risky?
We focus on leveraged ETFs because they have the potential for big returns. For example, TQQQ has delivered an average return of 41% per year since it started. That’s the kind of growth that gets us excited — and if it excites you too, you’re exactly the type of client we’re built for.
But it’s important to understand both sides of the story. While TQQQ has delivered strong long-term results, it also lost 80% in 2022, which is completely unacceptable from an investment standpoint. That’s exactly the kind of risk we work hard to manage. Our main focus is protecting you from those big losses by using automated tools to adjust how much of your portfolio is invested based on market conditions and your personal risk tolerance.
To give you some perspective, the S&P 500 has an average annual volatility of 20% — think of volatility as a way to measure how much risk you’re taking. With our technology, you decide how much risk you’re comfortable with — less, more, or about the same as the S&P 500 — and our AI takes care of the rest to keep your portfolio on track, with the goal of delivering better returns than the level of risk taken on.
Learn about why loss minimization is the key to building wealth.
How hands-on or off is alphaAI?
alphaAI is completely hands-off – set it and forget it!
All you have to do is set your investor profile and customize your strategies. After that, we take care of everything for you. We automatically make trades and manage your portfolio’s risk in response to market conditions. Our leading-edge AI system stays on top of the market so you don’t have to. Rest easy knowing that regardless of what the market does, we are responding in the best way for you and your financial goals.
What assets can I invest in through alphaAI?
Our strategies are optimized for ETFs, including leveraged and inverse ETFs. We will be adding additional asset classes in the future.
Learn more about ETFs and how they could help you achieve your investment goals.