Should I lever up?
 

What kind of question is this? It all depends on your risk tolerance and where your stops are.

I guess this is another "Look at me!" thread from you http://www.discussworldissues.com/fo...s/rolleyes.gif

And Interactivebrokers.com offers 1.67% margin rate

As I'm looking for advice from people who know something about finance, please be quiet. Also, IB having lower rates doesn't help me, retard.

Initial margin 50% maintenance margin 35%, btw

No, it doesn't. The relevant comparison is to the distribution of returns on equities, not some rate I am unable to use. Now go away. http://www.discussworldissues.com/fo...lies/smile.gif

You wrote "My broker's margin rates are 3%, which seems too low to not take advantage of". This seems to mean to me at least that the low rates are predicating your interest in using margin.

I pointed out you can get better rates with another broker... 3% is not unusually low, especially considering where rates in general are now. You'd also probably be better off switching brokers if using margin was of significant import to you.

I am 31, but my earnings period starts later and ends earlier than the average.

And yet 3% is so low you have to take advantage of it.... you make a lot of sense, KH http://www.discussworldissues.com/fo...s/rolleyes.gif

Like I said, this is all very personal and depends on your risk tolerance and your portfolio itself. You can not expect any meaningful answers to the question "Should I lever up?" from any of us.

"Look at me!" thread is all this is.

So why don't you?

Oh right... because NONE of us know your personal circumstances well enough to be able to provide you with anything even resembling adequate financial advice.

http://www.discussworldissues.com/fo...nwitdornan.gif

Actually Vetlegion did not offer anything substantive.

pchang just said a general mantra that may not be true nor may be applicable to you.

Have fun, KH.

holy ****. I just checked my brokerage account... I got $2500 in cash just sitting there. Holy ****! http://www.discussworldissues.com/fo...milies/eek.gif

My liquid net worth is double what I thought it was! http://www.discussworldissues.com/fo...milies/lol.gif

http://www.discussworldissues.com/fo...danceparty.gif

I got to keep better tabs on where I put my money!

I think you owe KH a cut at least for bringing the subject up and getting you to check your account. (KH will owe me a cut for mentioning this)

Options. Futures. Leveraged ETFs... Options on futures of leveraged ETFs (do they have these, that would be awesome!)... Pick a FOREX cross... any FOREX cross... and go ALL IN 200:1... grow some hair on your chest!

You have options to leverage yourself to hell and back man, stop wussing out!

I sense severe misunderstanding of why leveraged etfs and options are very poor ideas for long-term directional bets.

Pick a FOREX cross... any FOREX cross... and go ALL IN 200:1 QFT http://www.discussworldissues.com/im...ons/icon14.gif

I wouldn't lever up that high but I'm more of a mutual fund sort of guy instead of an active investor. What I really need to do is get a government job so I can use my 9 years of Army service so I can qualify for a government pension in just 11 years and retire by age 45. Then I can be part of the mounting public pension debt problem and laugh when KH whines that his taxes keep going up to pay my pension. Government jobs! http://www.discussworldissues.com/im...ons/icon14.gif

Rhetorical Questions

Dan, the relevant risk numbers come from comparison to NPV of lifetime earnings (say, post-tax), not to amount invested.

Nobody's provided me with any numerical tools yet (other than pchang's rule of thumb), so I'll attempt to build my own.

The savings represent ~0.4 * after-tax earnings of one year (for both myself and wife). Using that year as base 1, discounting at (say) 5% p.a., and inputting a reasonable future path of nominal income (2% inflation + projected real gains) over the next 20 years I get that they represent ~1.76% of my post-tax lifetime earned income (NPV).

There are some more analytics to be done of, course, but this is where we should start when thinking about this.

is based upon the amount of time you have until retirement. If you want to retire earlier than 65, then you should start de-leveraging sooner. Rough proportionality should be good enough. In the mean time, margin up with the same asset allocation you have now!

Do you think KH entertains the idea of losing his job seriously?