The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: Leveraged investing||Date: 2/28/2011 1:59 PM|
|Author: StockNewb||Number: 68568 of 78166|
Ok Guys, I really did get your points. The general consensus here is Margin is a really sharp knife that if you dont know what your doing you WILL get cut and even if you do you may get cut anyways.
Now yes, I want to play around with Margin and see if it fits me.
But what I see you guys missing is;
Im using funds not stocks. Funds are less volatile then stocks.
I have decided to leverage only about 15-20% of my portfolio. Two reasons the remaining portfolio should act as a gaurantee against margin calls and leveraging 100% is really risky.
I'll be holding a couple funds in the leveraged position instead of just one as I had planned. Due to volatility factors and it is harder to make two funds tank then it is to make one tank.
Right now I want to pick a couple funds that are consistent in there returns i.e large cap funds or very respectable manager's i.e Ned Goodman or both. I dont need to hit a home run, I just want small consistent gains. If I start going for the home run hits thats were I get greedy and potentially lose it all. Right now you guys THINK I'm being stubborn, which I may be, it is a failing of mine. But I am trying to learn and adapt and Margin just seems like an extremely usefull tool.
as per using option's, I like how you can hedge risk with them and it is sorta like leveraging but not quite. I think I may start using them in some positions too. and what I mean by check myself is do my due diligence and have controls in place to where I Can not go against my trading method.
I have no doubts I will get cut by margin either now or later, but I also have no doubts ill get cut by investing period. Everything has a place and time, I figure i'm 25 I dont mind the risk, if i was 40-50 years old it might be another story. I'd rather experiment now and find were my true risk tolerances are then experimenting when im 40 or 50.
anywho I just wanted to make sure my position was clearly defined. I have gotten the general feeling that this board hates margin, thats fine. I intend on using some of it, so now I am on to the advice stage. if you have used margin in the past, tell me what led to your downfall or your