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Leverage 2x Microsoft and Google for 5-10years
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Rookie Investor
Posted: 06 September 2024 19:50:23(UTC)
#8

Joined: 09/12/2020(UTC)
Posts: 2,081
Johan De Silva;318243 wrote:
It's certainly not FOMO as the last 5 years I have managed to beat the index's by some margin, the problem these two would solve is to make up an underweight allocation by deploying less equity. I am long time holder of ATT with JAM and they too are underweight these.

I could run a few experiments with a grand in each and see especially as there is a likely entry brewing by the end of the month.


Underweight relative to what? The index?

If so, why not just buy the index, that will solve your underweight or overweight problem.
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Thrugelmir
Posted: 06 September 2024 20:20:29(UTC)
#12

Joined: 01/06/2012(UTC)
Posts: 5,317
You have to change your life;318249 wrote:
I shall be holding both for the duration. Bear in mind that both MSFT and GOOGL now pay a quarterly dividend:.



If the £ continues to strengthen then much of the benefit will be negated.
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You have to change your life
Posted: 06 September 2024 20:26:41(UTC)
#13

Joined: 17/11/2021(UTC)
Posts: 2,194
Thrugelmir;318255 wrote:
You have to change your life;318249 wrote:
I shall be holding both for the duration. Bear in mind that both MSFT and GOOGL now pay a quarterly dividend:.



If the £ continues to strengthen then much of the benefit will be negated.


Good point except UK investors should include houses, pensions and savings in their AUM. So it's a strategy with counterweight benefits.
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ben ski
Posted: 06 September 2024 20:36:35(UTC)
#14

Joined: 15/01/2016(UTC)
Posts: 1,354

Thanks: 426 times
Was thanked: 3898 time(s) in 1013 post(s)
If you consider how bad the risk-adjusted returns of individual stocks are, then add a clunky form of leverage, that I don't think has been explained in this thread yet (leveraging a daily return means sequence of returns is going to add a layer of chaos to things), I don't think there's any way to argue this improves risk-adjusted returns.

The way to tilt against individual stock growth speculation would be to add something like WisdomTree Global Quality Dividend Growth, and because you've probably de-risked your equity exposure a little, you could increase your allocation to equities.

Hedgefundie on Bogleheads did a detailed analysis of using daily leveraged stock and bond market ETFs to generate a higher risk-adjusted return than unleveraged stocks. But even with a lot of good work, it went wrong immediately. It hit the one period in decades in which stock and bond prices crashed together. And that's not uncommon, because these things happen all the time, but what you think is a good idea now is based on what hasn't happened in a while.
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3 users thanked ben ski for this post.
Johan De Silva on 07/09/2024(UTC), The Spanish Inquisition on 07/09/2024(UTC), wydffart on 25/09/2024(UTC)
Ian Eccles
Posted: 07 September 2024 04:10:10(UTC)
#15

Joined: 04/07/2021(UTC)
Posts: 1,076

Thanks: 307 times
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I hold GOOGL, the dividend payments are paltry and paid in USD which you can convert back into sterling at your convenience when the rates are in your favour.
Now is not a bad time to buy, according to Morningstar, well undervalued, a share with future potential which is under pressure due to competition issues and legal challenges from rivals.
Average price target is USD 204
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Johan De Silva on 07/09/2024(UTC)
The Spanish Inquisition
Posted: 07 September 2024 09:00:26(UTC)
#17

Joined: 02/04/2014(UTC)
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Why not hold £700 in each 2x fund and alongside buy £1400 in each individual share and run them alongside each other, I would put money on it that the individual shares would outperform the 2x ers during sideways and downturns. Conversely during strong rebounds the 2x ers should amaze…
Would be very interesting to run and keep us informed. I have a Trading 212 account and might try it with small amounts, I’ll think on it but large meaningful sums it’s bound to go very wrong very fast for me 😂😂
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2 users thanked The Spanish Inquisition for this post.
Johan De Silva on 07/09/2024(UTC), Newbie on 23/09/2024(UTC)
Old Scientist
Posted: 23 September 2024 11:35:16(UTC)
#18

Joined: 22/11/2021(UTC)
Posts: 218
Daily leveraged vehicles are not designed to be held as long term investments due to the way they work.

If you want increased long-term leverage, because you think these companies will out-perform over the long term, why not just increase your positions to overweight relative to the index? Maybe 5% of your equity allocation to each company?
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