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53666362 No.53666362 [Reply] [Original]

>buy index etfs
>buy more etfs on margin against those index etfs
>double your money
what's the flaw in this plan? I ask because I'm new to investing and I know I have to be fucking something up here

>> No.53666383

cheesed to meet you

>> No.53666399

>>53666383
cheesed to meet you too fren

>> No.53666452

i have no idea but that sounds smart as hell go for it

>> No.53667030

>>53666452
ok sounds good will do!

>> No.53668049

>>53666362
that in theory by you dividing your investment between traditional stock funds and shorted funds against same stock funds in your portfolio, you may see better gains in long term placing entire investment in one or other (but if short term income is what you're after yes I believe this is what most daytraders do)

>> No.53668559

>>53668049
honestly I'm a brainlet and I have no idea what you just said anon

what I do understand though is that index funds always go up eventually, so taking loans to buy more index funds using your existing index funds to back the margin seems like an easy way to double the eventual returns on your index funds

maybe I didn't explain that well enough in OP post

>> No.53668620
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53668620

>>53668559
>what I do understand though is that index funds always go up eventually, so taking loans to buy more index funds using your existing index funds to back the margin seems like an easy way to double the eventual returns on your index funds
>always go up eventually
>eventually
It's leveraged people like you that cause crashes. People that think they are tough and can take big drawdowns usually start sweating bullets once the market gets a slight hiccup.
Also you have bias because you only look at US markets.
Russbros for example get regularly btfo every couple of decades without recovery.

>> No.53668654

>>53668620
So then you're saying that the only problem with leveraging US indexes is that people get scared and pull out when they shouldn't?

I'm not leveraged though anon, I'm a brainlet who just learned about index funds last month along with leveraging. It seems like a free money cheat if you're not immature and actually hold index funds like you're supposed to.

Considering a lot of people just stick their money in retirement index funds and forget about it, why doesn't every fund manager just use leverage by default?

>> No.53668827

>>53668654
>So then you're saying that the only problem with leveraging US indexes is that people get scared and pull out when they shouldn't?
This + people getting liquidated by force aka margin called.
4x leverage only takes a 25% drawdown to wipe your out. 100% loss. Probably the broker is going to liquidate you already once the market is down 18-20%.

>> No.53668845

>>53668827
I thought that might be a problem but I wasn't sure how low they'd have to fall to be called.

>> No.53668861
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53668861

>>53668845
Depends on how much leverage you have. There is no real "save" level of leverage.
As a bonus during harsh market conditions the brokers might increase their margin requirements literally forcing you to sell part of your position at a loss.

>> No.53668983
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53668983

>>53666362
Nothing at all. Literally, i do this constantly with XOR (because i really think its a project that will moon in 2024 considering the upgrades makoto promised and the airdrops coming) but any sort of project that keeps accumulating will make you a lot of money

>> No.53669049

>>53666362
>today on how anon lost his house

>> No.53669787

>>53666362
>what's the flaw in this plan?
You will lose all your money and end up in debt for life.

>index funds always go up eventually
No they don't.

https://www.cnbc.com/quotes/.N225

What's the difference between Japan's bubble and the bubble that's currently in the middle of bursting in America? Potentially nothing. What if the fed can't go back to zirp and qe? What if America can't keep its demographic ponzi scheme going? What if there's a covid-style black swan? What if you just time the market wrong? What if you're a dumb newfag who doesn't know what he's doing?

https://youtu.be/R4H7O4e_4sk

>> No.53669864

Your margin funds could get called, and then the market takes a rashy shit after, and you’re left with -80% not double