Debt Payoff Strategy Outperforms Risky Portfolio Rebalancing in High-Interest Environment

The original poster (OP) executed a strategic debt elimination plan by closing AMD and partial BITF positions to pay off a $7k, 31-month personal loan at 11.3% interest rate [Reddit]. The user reported being up 133% year-to-date but expressed conflict about taking profits, while maintaining a reduced BITF long position with a small 2x short BITF hedge and reallocating some proceeds to SPXL [Reddit]. The community response was largely supportive, with users like Scared_Step4051 and others congratulating the disciplined debt payoff decision [Reddit]. Financial professionals in the comments, including stockbroker MaxiByrne, noted that “gut-wrenching decisions often signal going against consensus and are usually correct” [Reddit].

Market data reveals discrepancies with the claimed 133% annual return. Individual performance shows AMD at 93-97% YTD, BITF at 112% YTD, and SPXL at 23.4% annual return - none reaching 133% individually [Citation:1][Citation:2][Citation:3]. The debt payoff decision is strongly validated by current market conditions, with average credit card interest rates at 21.39% (August 2025), significantly exceeding potential investment returns [Citation:6]. SPXL carries substantial volatility decay risk over medium-term holdings, making it unsuitable for 31-month investment horizons [Citation:3][Citation:7]. BITF demonstrates negative fundamentals with a P/E ratio of -13.12 and high volatility, representing speculative risk despite strong YTD performance [Citation:2][Citation:8].

The Reddit user’s debt elimination strategy aligns perfectly with sound financial principles, as paying off 11.3% interest debt represents a guaranteed return equivalent to that rate, far exceeding the 23.4% SPXL return or even BITF’s exceptional 112% YTD performance when adjusted for risk. The community’s positive reception and professional validation from the stockbroker commenter reinforce the wisdom of this decision. However, the claimed 133% portfolio return appears mathematically implausible without highly specific timing and allocation conditions that would be difficult to replicate.

The remaining portfolio strategy raises concerns: maintaining BITF positions (both long and short hedge) creates unnecessary complexity and exposure to crypto volatility, while SPXL allocation introduces leveraged risk unsuitable for medium-term holding periods. As one commenter noted, “one shouldn’t invest with high-interest debt above 6-7%” [Reddit].

• SPXL volatility decay over time could erode returns despite strong market performance
• BITF’s negative earnings (-13.12 P/E) and crypto market volatility threaten remaining positions
• Complex hedging strategy (BITF long + 2x short) increases transaction costs and management complexity

• Debt elimination provides guaranteed 11.3% return and reduces financial stress
• Monthly DCA plan allows systematic market re-entry at potentially lower valuations
• Strong 2025 tech and crypto performance (AMD 93-97%, BITF 112%) suggests continued market momentum for selective re-entry

Continue disciplined debt elimination approach while simplifying the remaining portfolio strategy. Consider replacing SPXL with unleveraged S&P 500 exposure for long-term holdings and evaluate BITF positions given negative fundamentals.