The other way to look at it is as a cheap source of funds if you're already holding a portfolio of low-vol stocks, but that's not what they say in the ads.
Pawn shops? That's a pretty lame analogy, and yes we do get the concepts of Capital, Risk and Core Competencies. The issue is with the ad itself repeated on CNBC ad infinitum, ad nauseum, designed to appeal to a certain type of person and which from this thread seems to be working. One is reminded of those supermarket loss leader ads or department store sales with the catch phrase "the more you spend the more you save" resulting in the housewife with a years supply of toilet paper and 2 years supply of canned tuna in her store room. Now if it were beer, that would be a totally different matter. We would then have to consider available cash, percentage discount offered, cost of credit from the credit card versus opportunity cost of wiring funds from our IB account to pay off the credit card, and of course expiry date of the beer on offer. Totally Innocent Question: Do you still get all riled up and jump on your white horse at the mere mention of alcohol, or is the horse in the pawn shop?
oh my aching head, could you tone it down a little? Yesterday was my birthday. I never want to see another bottle of alcohol again. You gotta admit, for a few breif hours though, I was really smart. Too bad nobody asked me anything about world peace. Oh well, maybe next year.
Doesn't that get you having to pay taxes on the dividend while at the same time generating an equivalent capital loss?
yeah well, those damn actuarial tables better be correct. Otherwise I am going to come up a little short. Everytime I think I have it covered, they raise the average age. I should probably buy some health care stocks just to hedge in case they come up with some kind of cure that keeps me going indefinately. I miss the good old days when all you had to bet on was the military industrial complex. And back then Presidents would give you a good stock tip in their farewell address.
Correctamundo! The margin requirement is 50%.... and for a reason. By using IB's loan, one could get levered 6:1... and even more if that money levered further with margin. Wouldn't take much of a market correction to wipe out investor's equity/capital. Highly dangerous.
Correctamundo! The margin requirement is 50%.... and for a reason. By using IB's loan, one could get levered 6:1... and even more if that money levered further with margin. Wouldn't take much of a market correction to wipe out investor's equity/capital. Highly risky.