Comments on: Leveraging to Increase Investment Returns- walk before you run

By: How Exposed is the Smith Manoeuvre to the Lipson Case? | Million Dollar Journey

Wed, 19 Mar 2008 09:34:03 +0000

[...] For those who are on the fence about SM, I have posted on taking a more contextual approach to this issue before. [...]

By: The Financial Blogger » You Might Not Be Aware of This: You Are Leveraging

The Financial Blogger » You Might Not Be Aware of This: You Are Leveraging — Wed, 20 Jun 2007 11:30:53 +0000

[...] are two other posts regarding the risk related to leverage strategy. Thickenmywallet started with “Leveraging to Increase Investment Returns – walk before you run” and then, Canadian Capitalist with “Should you Leverage?”. All those posts made me [...]

By: Financial Jungle - » Jungle Bulletin: You Give A Little Love And It All Comes Back To You

Tue, 19 Jun 2007 08:05:13 +0000

[...] Thicken My Wallet writes a very fulfilling piece on the merit of leverage investing. My favourite part is when he uses a struggling business as an analogy to an under-performing investor. You’ll have to visit his link as I won’t give it all away. Not to be outdone, Canadian Capitalist reinforces Thicken My Wallet’s post by reminding borrowers how swiftly the avalanche of dot-com money vanished in 2002, and investors should thread carefully when considering leveraging. [...]

By: Should You Leverage?

Should You Leverage? — Tue, 19 Jun 2007 00:54:11 +0000

[...] was going to list all the reasons when you shouldn’t leverage and conclude with a maybe, but Thicken My Wallet beat me to it with a great post on this very topic. I have slightly reworked this post to avoid [...]

By: admin

admin — Mon, 18 Jun 2007 17:11:07 +0000

FB- any strategy which involves taking money out of registered accounts is fundamentally misguided. If you are in a high tax bracket, there are more than enough government sanctioned tax shelters/loss vehicles to use.

CC-Looking forward to the post. I’ll link to it. Your strategy of capping leveraging to portfolio size is quite prudent to limit down-side risk. Hope you share this with your readers.

By: Canadian Capitalist

Canadian Capitalist — Mon, 18 Jun 2007 14:13:41 +0000

I can’t agree more with your opinion. While leveraging will most probably work, that is not the issue. The issue is whether most average investors should take the added risks of leverage.

On a personal note, I do leverage myself. But it is more of a liquidity tool when I think there is an irresistible bargain in the market and I don’t have enough cash. It rarely happens (maybe once a year) but then I try and pay down the loan within the next year. I also restrict leverage to 10% or less of our total portfolio.

As an aside, I have a post scheduled that deals with this same topic.

By: FourPillars

FourPillars — Mon, 18 Jun 2007 12:54:45 +0000

Great post. I definitely agree that leveraging isn’t for everyone and that all investors should make sure that their all aspects of their finances are in good order before worrying about “extra” things like leveraging.

I’ve seen some leveraging strategies which advocate leveraged investing over rrsps which I believe is a huge mistake for someone in a high tax bracket. If you can contribute at a 40%+ deferral rate and withdraw that same money later on at a much lower average tax rate and don’t pay any tax in the interim, that’s a gift from the gov’t in my opinion and shouldn’t be missed.

Mike