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No. of Recommendations: 3

Im using funds not stocks. Funds are less volatile then stocks.

I suggest you check out the prices of equity mutual funds in 2008 and reconsider. Many lost in the range of 40%. Some more. My 401k was all in highly-rated mutual funds and lost over 40% that year. That was $93k of market losses.

But of course it wasn't margined (not possible in a 401k). I didn't sell any of it, and it recovered .

If it had been margined, I would probably have lost it all - 12 years of savings. It's an expensive lesson. You say you are 25 now. Do you want this to happen when you turn 37 and start over ? It would be a very expensive lesson to learn.

Options are very much leverage. But unless you use naked options, you cannot lose more than you invest. Options are not for newbies either.

Margin cannot just break you, it can make you go broke. Just don't go there.

As far as "hitting a home run", just forget about it. No one can consistently beat the market. Everyone has good and bad years. Many managers who "beat the market" still had huge losses in 2008. You don't want to be leveraged during those times, and you can never tell when it's going to happen.
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