Finally, I decided it: I'll get a loan on my home (mortgage) to invest!

[crgarcia]

Quote from ElCubano:

If he can gaurantee 5% or more a year return then perhaps...but since he can;t gaurantee that he will even stick to the plan much less the 5% then ..I dont think so...

Imagine he takes out 25% and his house goes down further in value and then invest it in the market and he gets hit for another 25% on his DDM .,....then what amigo?? left with his dick in his hand...

then he panicks to only get out and either proceed to spend his money or pay back 3/4 of the loan...

I don't even worry, I have considered 30% downside as something I can actually expect (nobody may forecast an exact bottom)

If it goes down 25% as you say, as only 75% is in the DDM, losses are 37.5% of the investment capital.

I will not be worried, I might not even check quotes at all, until the 25% "almost cash" (T-Bonds, bonds funds, money market), is gone by paying interests, and this will take some years.

 

[ElCubano]

Quote from crgarcia:

I don't even worry, I have considered 30% downside as something I can actually expect (nobody may forecast an exact bottom)

If it goes down 25% as you say, as only 75% is in the DDM, losses are 37.5% of the investment capital.

I will not be worried, I might not even check quotes at all, until the 25% "almost cash" (T-Bonds, bonds funds, money market), is gone by paying interests, and this will take some years.

good luck..I hope it works out.

 

[crgarcia]

Quote from asap:

gambling is ok but are you trying to sell it to yourself as investing?

I am not gambling, this is NOT active trading.

This is why I'm going for the Dow Jones, to buy and hold it until overvalued again, or until good profits are made (Dow 12,000+).

 

[Kassz007]

Quote from crgarcia:

I am not gambling, this is NOT active trading.

This is why I'm going for the Dow Jones, to buy and hold it until overvalued again, or until good profits are made (Dow 12,000+).

Why buy the Dow?

 

[crgarcia]

Quote from Bolimomo:

Take a mortgage on a house to trade is okay - if you know what you are doing.

Take a mortgage on a house to invest. I think that is bad.

It depends on your start-point/end-point. If you mortgage your house in beginning of 2008 to "invest". The broad market had been down more than 40%. A lot of mutual funds had been down 40%. It's likely your own picks might have been down 40%. (Or more if you invested in bank stocks.)

You get a double whammy.

People only get away with it in very bullish markets (like 1995 - 2000).

All traders lose, so that guarantees to lose your home.

I had relatively small quantities, to trade (about $30k). I won and then lost several times, getting back to my original 30k.

Now that I'm going for big money, I want something certain, like buy and holding the Dow at (somewhat) undervalued levels.

 

[crgarcia]

Quote from blackjack007:

there's nothing wrong with borrowing money at low-interest to invest in something that pays higher returns, but putting 75% into a 2x ETF is nuts.

Why?

2x 75% equals 1.5X net leverage.
Those 25% in "cash-equivalents" give me peace of mind to tolerate those moderate (30%) temporary fluctuations.
And gives me time (and money to pay interests) in case the Dow takes a few years to start to go up (3 years).

 

[ElCubano]

Quote from crgarcia:


, I want something certain,

Certain is that you own your house outright. You are way ahead of the game depending on your age. Keep it that way...peace

 

[Mvic]

Quote from ElCubano:

Certain is that you own your house outright. You are way ahead of the game depending on your age. Keep it that way...peace

Having seen a few more of his posts I would say you are absolutely correct.

 

[Bolimomo]

Quote from crgarcia:

All traders lose, so that guarantees to lose your home.

No point in continuing this "discussion". Again, it's the "since I can't do it, I concluded that nobody else can" kind of shit.

I regret wasting time in this thread. It will be ignored forever.

 

[cstfx]

Quote from Bolimomo:

No point in continuing this "discussion". Again, it's the "since I can't do it, I concluded that nobody else can" kind of shit.

I regret wasting time in this thread. It will be ignored forever.

You should have put her on ignore a long time ago. If it wasn't for all you quoting this pantywaste I wouldn't have even known what bs she was shovelling.