there are always going to be warning signs before most black swans... the trick to what I said was active management, I didnt say seat back and collect the divs... also, as I was writing it I though also about increasing yield by writing options against the long positions, mostly spreading, to collect premium... not a whole lot, but it would increase the yield on the overall basket...
One can design their own carry trade. Plenty of possibilities, especially in the interest rate arena.
Usually it is more capital at disposal you want, not more leverage. I took a different route and did borrow $54000 in-blanco on a 10 year loan from a bank at 5.6% interest, with 30% interest rate deduction in my country I pay $2016 (effective rate of 3.7%) in interest on the $54000. Combined with a ~50% annual profit return of trading, it's a very good deal to boost the account using a private bank loan.
If you intended to use this capital for trading, loaning from IB would have been cheaper and involve less bureaucracy ( in case you had enough capital upfront to fund the IB account )
If you have the infrastructure to stay market neutral... And you have actual trading expertise... Then it's cheap money, baby.
yes you may be right. But then the question how to use this money which is available at low interest rate?
A mix of stocks, bonds, REITs, gold and cash. Should return about 6-9% a year with similar volatility(7-8%) and a max drawdown of 15% Me and Cutten wrote a lot about that in my journal Global Macro Trading for a Living