r/investing
Just my take: Financial leverage is just debt disguised as a tool, yet it's nothing more than a curse. Steer clear of it.
Author argues financial leverage is disguised debt and advises against it, recommending long-term index fund investing instead.
- Leverage instruments like margin and options are fundamentally debt that increase the risk of total capital loss.
- Systematic market outperformance via leverage is statistically unlikely for retail investors.
Disclaimer, I originally posted this on Wall Street Bets because I was unsure where to post and 7 generation of my ancestors got roasted, so I decided to switch over.
I'm going to keep this short because less is more.
Margin trading, calls, puts, futures - they're all debt. Nothing more.
Specifically, it's debt crafted to fool you into believing you're doing something smart, because they pertain to investing instead of gambling.
Nobody beats the market systematically, and leverage is nothing more than another way that gets you to fail differently.
You want to beat the odds? Play the long game, invest in index funds, and most importantly be reasonable. That's the single, greatest protector against losing your life savings.
this guy's on to something
\> be reasonable
Oooooooohhhhhhhhhh.....
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