I'm (trying) to pose a question purely from curiosity, but in the interest of clarity, I should say that M1 Finance is the brokerage I'm referencing. They offer a 2% margin rate with a $125 flat fee per year, which means for any five-figure account this is probably worth it.
Now my question is, assuming that even fairly conservative index funds average about ~6% returns per year, does it make mathematical sense to maximize margin if the rate is lower than this return?
Sure, in down years you're paying an extra 2% on your losses, but if we trust historical data than the down years are few and far between and returns should be in your favor over time.
Submitted June 15, 2021 at 10:34AM by RetroPenguin_ https://ift.tt/2TzCUG5
