Key insights
- The post discusses using margin to buy into a market correction. While the individual has a high income and net worth, increasing leverage during a correction adds significant risk. High interest rates on the margin loan and the potential for further market declines could amplify losses, making this a bearish signal for the individual's portfolio and a cautionary tale for others considering similar strategies.
Am fully invested but don't have any available cash since I've been paying off an existing 50k margin loan aggressively. I've often read investing on margin while young is a good idea but have held off due to sky high market and PEs. However given this market correction I'm tempted to take out 5-10% of my portfolio value as an additional margin loan at 5% interest to invest into VT/VTI for probably 110-120% total leverage. Probably have it paid off within a year. Late 20s 1.5m nw 500k/year income. Thoughts?