Key insights
- The author proposes a strategy to use 2x leverage after a 40% market crash to accelerate retirement savings. The strategy aims to capture the recovery to previous all-time highs and then de-lever. While potentially boosting returns, the strategy carries significant risk due to the volatility of leveraged instruments and the potential for further market declines, making it unsuitable for risk-averse investors.
I may need a bit higher returns than 100% stocks provide in the next 20 years in order to achieve my ideal retirement goal. I can't help but think that taking advantage of a major crash and the subsequent recovery is the safest bet. So I came up with this strategy:
- Wait for the market to crash by 40%; 2. Go 2x leverage by using a leveraged ETF, or alternatively futures; 3. Ride out the recovery; 4. Once the market goes back to the ATH from before the crash, my goal is achieved and I can go back to no leverage for the rest of my life.
Do you think that this kind of strategy is worth a shot, or is it too risky? Is there a safer way to achieve what I want? Thanks!