Dear Bogleheads,
I am very new here and this is my first post so apologies in advance if this is a topic you have debated already .
As someone who is 2 years away from retirement , and confronting a potential overvalued stock market , I am investigating if there is a leverage-based alternative to having cash or bonds in the portfolio . The strategy I am considering is :
Portfolio : Nearly 100% equities
In down years , borrow against the portfolio
In up years , sell and clear past debt
I ran Monte Carlos on the last 100 years’ data and this seems to perform better than stocks + bonds . There is always the risk that stocks drops more than 80% and the margin calls wipes out the portfolio, so am guessing there needs to be some protection against that.
I am sure many of you have already looked into this - would appreciate any perspective you can offer .
Almost there.
I am very new here and this is my first post so apologies in advance if this is a topic you have debated already .
As someone who is 2 years away from retirement , and confronting a potential overvalued stock market , I am investigating if there is a leverage-based alternative to having cash or bonds in the portfolio . The strategy I am considering is :
Portfolio : Nearly 100% equities
In down years , borrow against the portfolio
In up years , sell and clear past debt
I ran Monte Carlos on the last 100 years’ data and this seems to perform better than stocks + bonds . There is always the risk that stocks drops more than 80% and the margin calls wipes out the portfolio, so am guessing there needs to be some protection against that.
I am sure many of you have already looked into this - would appreciate any perspective you can offer .
Almost there.
Statistics: Posted by Elayadam — Sat Dec 21, 2024 8:55 am — Replies 3 — Views 136