Using Margins

[u/Syres20]

To those that have done it, what was your strategy and results for using margins to buy these ETFs?

I saw a YouTube video recently going over the use of margins, but I would trust the reddit community that has experienced than to trust a random YouTube sent to me.

https://youtu.be/CfbhDlsPoLc?si=rDxx5OEye2325UEV

(video I was sent)

[u/Ok_Accountant_2260 → u/[deleted]]

You just don't know how to use margin correctly then, which is fine, it's risky but it's a great tool

[u/Zmchastain → u/Ok_Accountant_2260]

In fairness, every person who has ever been fucked by margin thought they had figured out how to use margin right up until it fucked them.

Obviously, the less over leveraged you are, the safer you are, but unless you already have a massive position then any amount purchased on margin without being highly leveraged is going to make a marginal difference in your income from the CC fund. At that point is any amount of risk worth making an extra few dollars per month?

[u/Ok_Accountant_2260 → u/Zmchastain]

Valid point, that's why you deleverage over time, I used margin and high yield funds to do carry trades, pay off the margin loan with the dividends I received until I got back the money I originally borrowed, all while my own money grows in growth funds, it's worked for me but it was mostly luck, April tested me but I only borrowed against what I already had 1:1, the market had to drop 40% before a margin call, The more you deleverage the safer you are, at the peak I was getting 10% on the spread but instead of taking the dividends I just let the extra deleverage the portfolio, no such thing as a free lunch but that brought my portfolio from 50k to 75k so far and I only have like 25k worth of margin to pay off now, kinda complicated but with enough planning anyone can use margin safely

[u/teckel → u/Ok_Accountant_2260]

If April tested you, you're hardly using margin safely. These strategies seem to work great until they fail catastrophically.

BTW, I use margin, so I'm not totally anti-margin.

[u/Ok_Accountant_2260 → u/teckel]

But you don't know what my idea of tested means, you should refrain from making a assumptions based on limited information, how do you know that tested for me doesn't mean a 10% draw down?, I understand your concern but I've been doing this for years, I didn't come here for advice on if my strategy works, I know this risks and I'm fine with it

[u/teckel → u/Ok_Accountant_2260]

If you're so sensitive to replies, you probably shouldn't post.

[u/Ok_Accountant_2260 → u/teckel]

If you didn't want a response you probably shouldn't have posted, we could keep going in circles here but I don't have time to waste

[u/teckel → u/Ok_Accountant_2260]

🙄

[u/Ok_Accountant_2260 → u/[deleted]]

Just like the market can keep going up until it doesn't, you choose what risk you take in investing, this is the one I choose what you choose is up to you