With the bull markets we have been seeing, and nearly no signs of stopping I am thinking of using a small percent of margin money to borrow and invest in the market. Current interest rate on my margin account is 5.5% per year, so to make money I have to actually do better than that. I have been thinking 50% of the borrowed money to invest in AAPL or MSFT and the other 50% with some good dividend paying stocks such as ABBV, T to cover the interest with dividends.
The downside is if market tanks, but I am planning to use only 10-20% of my margin balance, so hopefully even then I won't get called to cover forcing to sell my current holdings. And as long as I still cash in the dividends I should be able to pay off the interests. Does that seem like a good strategy? What do I need to be aware of and if I wanted to do well and beat 5.5%, is there any other strategy worth considering than what I have been considering?
Submitted January 18, 2020 at 05:17PM by Naive_Suspect https://ift.tt/2sDUTht
