Re: How safe is the stock market?
On another note, when should you borrow capital? Let's say you have 50% large cap and 50% emerging markets. I've read that as a young investor, is it appropriate to borrow 1/3 of your capital. Is it better to not borrow and go 100% on emerging markets, or borrow money and keep the proportions 50/50?
In regards to borrowing, with margin rates being high unless you have $1 million is assets, does it make senses to short something such as AGG to borrow capital? Not counting bond price fluctuations, it seems you will just have to pay the ~5% dividend every month for your short, which is much cheaper than margin rates.
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