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Reply to #5):

 

I am not sure how do you get 30% by shorting stock and buying index.

 

The way I see it.

Both investors have 100k.

1st buys S&P for 100k and gains 20% - profit 20k

2nd shorts stock for 50k and buys S&P for 50k

stock gains 10% S&P gains 20% - profit 5k+10k=15k

- margin interest%

 

There are many ways to outperform the market.

My favorites are:

1.Covered call writing.

2. 130/30 portfolio (shhh don't tell anyone I told you this. "They" dont want personal investors to know all Wall Street tricks ;)

 

Good luck

 

 

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