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No. of Recommendations: 0
@ Rayvt,

Thanks, I am here to find opinions different than mine, that is why I asked you to comment.

I realize after reading you post I have to have a strategy for when interest rates rise. I assume that IB will raise rates on borrowed money.

Am I thinking correctly on this? If I have 2k in debt on a 20k liquidation value portfolio that is 1.1 leverage. If I take a beating from Mr. Market and I loose 30% now my NLV is 14000 and my leverage is 1.143. This seems reasonable.

If I started at 20% margin that would be 4k debt on 20k. 1.2 leverage. Drop 30% brings it to 1.286. 29% margin seems like it would be pushing it. This wold force a buy and hold forever investor to possible sell low instead of buying low. This seems unreasonable.

I see why 20% is at the high end of the recommendation. It sounds conservative but I have to think about what it turns into when the market drops.

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