It's amazing how low you can reduce risk and still achieve reasonable rewards.
30% small cap, 70% 5 year Treasury can yield similar results to a 50-50 total stock market, total bond blend.
If you AIM-HI that 30% SC you might reduce down to 24% average stock exposure. (You can't reiterate that however as AIM just wont provide any trades). 80-20 periodically rebalanced can work as well as having AIM'd.
If you substitute in a third in a 3x SC for the AIM stock value, you're down to 8% 3x SC holdings. Whilst still potentially achieving 50-50 type rewards.
Into the Realms of Zvi Bodie or Nassim Taleb territory of mostly safe, a little highly speculative.
Reviewed to readjust the 3x holdings at most once yearly, and your worst case loss (assuming Treasury's to be safe) during each year is the 8% stock holdings - and any total loss of that 8% might in part be reduced by gains from the other 92% of holdings.
etfreplay don't have data for URTY, but for 12% UWM, 88% TIP since 25th Jan 2007 (yearly total gains)
2007 9.5% 2008 -8.5% 2009 13.3% 2010 11.5% 2011 9.5% 2012 9.3% 2013 2.0% YTD May 54.5% total gain 7% annualised
I suspect the figures would be much the same for a 8% URTY, 92% safe combination.
Compared to an investor who perhaps only counted their liquid assets, perhaps their home being a third of their total wealth and who achieved a 7% real (cost of living adjusted) return on their two-thirds, a conservative investor, given such a relatively low amount of stock exposure, might opt to count their total wealth amount, and a 4.8% real return on that amount (as per longtermreturns.com indicate to have been the annualised real gain since 1926) might in effect have achieved similar overall benefits to the investor who achieved a 7% real return on two-thirds of their total worth.
A 3x leveraged ETF's wont provide anywhere near three times the longer term return of the 1x, likely it wont even break-even with the 1x. It will endure sizeable higher volatility. During up trends it progressively increases its risk exposure as prices move higher, scaling up the risk/potential reward. During down trends it progressively reduces exposure. They only attempt to provide three times the single daily movements. When you deleverage a leveraged ETF however and deposit the remainder of funds in an investment that compares to the cost of carry (borrowing rate), then the gains of the 1x levelled leveraged ETF (third in 3x, two thirds in treasury's) are similar to the 1x. The main benefit being that rather than having perhaps 30% downside exposure in any one year, you might have just 8% downside risk.
Depending upon whether you leave all the 'cash' (safe) idle, or perhaps periodically dip in and out of opportunities that provide a better reward than treasury's, those modest rewards might be enhanced further.
News 
Market Data 
Discover 
