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| View Poll Results: Pick a plot | |||
| Anguished persson wandering a big city; perhaps looking for a building to jump off of when he meets an old h.s. friend |
   
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1 | 25.00% |
| teenagers in love, forced to watch a youngster at an amusement park, kid disappears; they must find |
  
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1 | 25.00% |
| something else - see question two |
  
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2 | 50.00% |
| Voters: 4. You may not vote on this poll | |||
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#11
09-24-2007, 01:34 PM
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Re: Buying on Margin/ Using Leverage?
is it worth it to use Leverage when investing for the Long term ( a year, 3 years, 5 years, etc.?) or is the commissions usually too high?
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#12
09-24-2007, 02:34 PM
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Re: Buying on Margin/ Using Leverage?
[ QUOTE ]
is it worth it to use Leverage when investing for the Long term ( a year, 3 years, 5 years, etc.?) or is the commissions usually too high? [/ QUOTE ] Your "commissions" are the same if you use margin or don't. But the interest that you pay may be kind of high. If you are paying 8-10%, you might be +EV over a few years. It depends on the type of portfolio you are using. If you are paying 10+%, I would never consider it. Personally, I would only use margin with a globally diversified portfolio, but I wouldn't use it with rates this high. -Tom
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#13
09-24-2007, 02:37 PM
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Re: Buying on Margin/ Using Leverage?
[ QUOTE ]
is it worth it to use Leverage when investing for the Long term ( a year, 3 years, 5 years, etc.?) or is the commissions usually too high? [/ QUOTE ] Commisions are rather high for the long term when just using margin. I am typically between $8000 and $15000 on margin on a $32000 portfolio. But, most of the investments I make on margin are designed to be short term gainers. So in my case the interest I pay is outweighed by what I hope are short term 10% and better gains.
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#14
09-24-2007, 06:05 PM
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Re: Buying on Margin/ Using Leverage?
[ QUOTE ]
is it worth it to use Leverage when investing for the Long term ( a year, 3 years, 5 years, etc.?) or is the commissions usually too high? [/ QUOTE ] The trouble both with margin and short-selling is that you not only need to be right but you need to be right right now. With margin you may be right about the price being a good value and you will be proved right in the long run. But you may never get a chance to see the long run if further declines in the price and margin calls force you out of the position. Similiarly with selling short. You might have recognized what Enron was doing and sold it short at 25. In the long run as it went to 0 you would have been proved right. But if your short at 25 was on the way up you would have seen it go to 85 first, likely washing you out of the position. It's hard enough to be right. It's really hard to be right right away. PairTheBoard
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