I'm 23, and in addition to my 401k at work, I have a few thousand saved in an IRA. Right now I have it sitting in Treasurys earning around 3%.
Over the past 50 years the S&P has averaged around 11% per year in total returns. I'm perfectly willing to invest it in an index (like the S&P) or in a few bellwether-style single stocks (think Warren Buffet: KO, BAC, JNJ, etc). Most mutual funds underperform the market, so I'm not really interested in trying to pick those out at this point (unless you have a convincing argument).
I'm looking for feedback on the idea of investing the IRA balance in a 3x leveraged S&P ETF, specifically UPRO. My thinking: If the S&P averages 11%, this should average ~33%, minus fees of about 1%. The balance of the IRA is about $5k, and I'm not drawing retirement for another 40 years, so if somehow I "lose everything" it's not going to ruin my life. My future contributions to this IRA will probably be put in something safer, but I'm willing to take a risk now.
Is my thinking on how this 3x leveraged ETF works correct, or am I missing something?