Re: The Ultimate Leverage Investment Thread
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i understand this, but say you have investment A. priced at $100. you think it is very unlikely to drop to $80. so you leveraged 5 times with a stop loss at $80.
2 years time it is at $170, as you expected. +$70. leveraging cost you 7% annually, costly you $15, so you only made $55. but you leveraged at 5 times, so youve made $275, rather than the $70 you would have.
surely it is better to leverage than not?
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You're missing my point. My point is that you should probably try to set a target price to get out. Maybe either adjust your "stop loss" up (just mentally) as the asset pirce goes up or just pick a price and say "if it goes up x% I'm getting out." I would just hate to see something go from 100 to 170 and then back down to 110 or 120 with you having given up a lot of profit.
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