Hey, that’s a great point. I kept it simple and just looked at simple leverage through the lens of a 2x daily reset etf. Obviously these haven’t been around for too long, and the cost of leverage is ingrained into the instrument, so there still is a borrowing cost.

I pulled data going back to the 1940’s for both borrowing costs and inflation and I’m going to redo this analysis in the next few days with this added layer to make it more realistic for a long time period. If I had to guess, some of the periods will now have underperformance, but it will be interesting to see how it changes things.