r/letfs
Anyone back to VOO as a placeholder?
Suggests using VOO to capture upside and switching to SSO during dips for amplified recovery, noting tax implications in taxable accounts.
- Markets are ripping, making scaling into broad market ETFs an effective way to capture upside.
- A strategic rotation between VOO and SSO can generate profits regardless of market direction.
- Tax implications in taxable accounts can complicate the strategy of selling and buying ETFs during market dips.
Usually when markets start ripping like this, I've found that scaling into VOO at ATHs allows you to keep capturing upside...BUT
If it craters, two things, you can scale out every 10-20-30% dip into SSO and make money every time (if your horizon is more than 1 year).
If VOO keeps going up you make money.
Taxable accounts are a double edged sword, since you can carry a loss if VOO craters 30% and buy SSO for the recovery, but taxes come into play buying/selling
IRA its a bit cleaner.
Thoughts?
Yeah. It's called deleveraging or DCAing. I do it. I've had discussions on r/LETFs about it (and as expected it was met with mixed actions).
I usually don't have 10/20/30% drop rules. I usually just go by feel. I however go from 1x to 2x or 2x to 3x as it drops more and more. Maybe because the biggest difference between me and you is
Taxable accounts are a double edged sword, since you can carry a loss if VOO craters 30% and buy SSO for the recovery, but taxes come into play buying/selling
Taxable accounts are a BENEFIT since selling low with losses in your VOO and going into SSO or selling your UWM to go into TNA will create capital losses that offset your gains and/or W2 income. This creates an added artificial boost when you're "buying the dip". You get no such advantages with your tax-advantaged accounts (and why I prefer to allocate capital with those AFTER I have made moves in taxable first).
Sure you'll have to pay taxes when you eventually deleverage your UPRO/SSO to SSO/VOO but you'll only be making money on your out-performance. If you repeat the process enough times, you should have built a based of VOO with very low entry prices.
Are you sure VOO and SSO don't trigger superficial loss? They both track SP500. Just one is borrowing money to do it...
Are you sure VOO and SSO don't trigger superficial loss?
Are you talking about wash sale or are you not understanding the leverage aspect?
In terms of wash sale, even selling VOO at a loss for SPY doesn't trigger wash sale so SSO is even less likely.
SSO is 2x VOO. I don't normally buy or DCA into SSO unless it's pretty bad correction or I'm de-leveraging from UPRO. I didn't buy into SSO in either the 2025 lib day or the 2026 Iran war dips. Last time I bought was around 2024 when I de-leveraged from UPRO.
Capital Losses do not offset W2 earned income. Unfortunately.
They do offset distributions like dividends. Short and long term capital gains/losses overlap. But, cant reduce AGI from W2 via Capital Losses.
Or, tell me how you did it 😂
Capital losses can offset W2 or other ordinary income AFTER it offsets capital gains and dividends. Capped at $3K a year.
Ah, yes, the $3k max - we are on the same page then. Your original comment made me think it was more impactful. Forgot about the $3k because its basically useless. 😂
I'll pass on catching a falling knife. We still have stupid people doing stupid things.
Cash is a position.
https://preview.redd.it/zuy0zhjaoj6h1.png?width=1861&format=png&auto=webp&s=627d176a78f3ec825e17767f29243707f084414a
Cash?
At 12% pullback on TQQQ or when the green arrow disappears on SPY.
https://preview.redd.it/bw7sql44go6h1.png?width=1875&format=png&auto=webp&s=7398b49dc95676aa53fd5e737a03d68b47c131ff