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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: OlafB who wrote (77171)	2/16/2025 8:44:26 AM
From: Elroy	1 Recommendation Recommended By Harshu Vyas Read Replies (2) \| Respond to of 79000

A main consideration of a margin loan is what percentage of equity will the loan be (<- bad grammar!). For example, if you have $100, taking a $5 margin loan seems fine to me, if you're invested in reasonable equities. To get a margin call your now $105 portfolio would have to drop more than 90%. On the other hand, if you have $100 and you take a $200 margin loan, you're in deep doo doo. Your now $300 portfolio might drop a very small % and you would get a margin call, forcing you to liquidate assets at the bottom. I am always on margin, but I try to keep the borrowed amount around 10%-15% of my assets. A 0% margin loan is great, as long as you don't get close to a margin call forcing you to sell assets at the bottom of the market. If the margin interest in a given year is greater than the standard deduction, you can itemize deductions and deduct margin interest on your taxes. That's nice. Also, don't hesitate to ask your broker for a larger amount of loan or a lower rate. I've got a low margin rate from TD due to constantly asking them if I can have a lower rate, and (surprisingly) the response was often yes. But ya gotta ask.

To: OlafB who wrote (77171)	2/16/2025 1:15:09 PM
From: Paul Senior	2 Recommendations Recommended By Mattyice Spekulatius Read Replies (1) \| Respond to of 79000

I used a lot of margin in my younger days. When I was in the workforce. Not in my college days. I alway had several positions in the account, and that I felt offered me some safety vs. betting all on one stock. Got margin calls a couple of times when markets suddenly dropped. Never was wiped out though, and always came back. Esp. with being able to stay in the market for the market turns and also having a job where I was able to deploy cash into the market. At some point I liked that I was able to have several dividend stocks in the portfolio, and that their individual yields were higher than the margin rate I was paying. Easy money, but not a lot of it. Can't remember, but I believe I kept margin commitment pretty high - maybe varying 50-80% of what I could get. Needed that to get max $ from div. yield in account and margin rate. My idea with margin was to use it to bet on individual stocks where I believed I could see the stock appreciating. Stocks that were not already up to highs that the market already seemed to price in. From what I read here, the stock/etf/fund selection proposed would be from an inexperienced but cautious person. Okay way to learn about how one actually feels with having a margin account. Myself, I would just take more risk with just a few stocks I selected and bought. If any/all move up, there's another self-learning opportunity: -- Do you relax and sell and take profits, or will you be the type to buy even more shares or more other stocks (which can be done with having more margin available as the little portfolio increases.). I was the latter type. Anyway, I'm in a different situation today, having more cash than I see opportunities, and more interest now in finding out how I should spend money, rather than making it.