If you buy and hold a leveraged ETF, anything can happen.

The Wall Street Journal Markets warns that leveraged ETFs are not simple buy-and-hold tools. They reset daily and can suffer from volatility decay, where losses compound even if the underlying index eventually recovers. A 2x or 3x fund may deliver returns far different from what investors expect over weeks or months.

For example, if an index drops 10% one day and rises 11.1% the next, it returns to breakeven. But a 3x leveraged ETF would fall 30% and then rise only 33.3%, leaving it down about 6.7%. That gap is not luck; it is math.

Investors who hold these products long-term are taking on risks that even the WSJ Markets describes as unpredictable. Leverage can amplify gains, but it also amplifies losses. Without a clear exit plan, you are not investing—you are gambling.