Using leverage responsably for long term personal investing

Based on a recent thread about levered ETFs - Is there a way to use leverage in a responsible manner to optimize long term returns? Not looking for short term trading strategies, mostly looking to see if there longer term approach to use leverage to optimize a multi-asset personal portofolio. For added context I have a WM account with UBS/MS that holds equity ETFs and is rebalanced a couple times a year. Im fairly young, dont plan to use the funds for a while, and have high risk tolerance.

Wouldnt ask an FA because they face asymmetric returns when recommending riskier strategies to clients.

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Comments (2)

Jun 10, 2021 - 1:39pm

You can't really get gains long-term using a leveraged ETF. Because the losses are also magnified. And losses hurt an ETF more than the gains will gain. However, you can use short day/swing trading to profit. 

https://www.investopedia.com/articles/financial-advisors/082515/why-lev…

Read this article before you put any money behind a leveraged ETF

The easiest way for a retail investor to use leverage long-term is to put a downpayment on 4-5 houses and then rent them out to cover the mortgage. Great anti-inflation vehicle because you can always increase rent. In 30 years you will own 4-5 houses for the price of the down payment and maintenance fees. At this point you are either cash flow positive, or you cold sell the houses as 3x-4x what you paid. Of course, it is easier said than done, but it is a tried and true way for normal people to make a few million by the time they hit 55-60. 

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