Comments on: There’s a fine line between good and evil… http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/ Investing and Personal Finance Sat, 11 Feb 2012 17:11:02 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Sandeep Patil http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-19375 Sandeep Patil Tue, 16 Jun 2009 20:44:50 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-19375 Leveraging is a double edged sword, can be good or bad depending on the circumstances. Leveraging is a double edged sword, can be good or bad depending on the circumstances.

]]> By: Leveraged Investments – Exit Strategies http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-1783 Leveraged Investments – Exit Strategies Sat, 27 Oct 2007 19:12:42 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-1783 [...] See the last post in this series called “There’s a fine line between good and evil”. [...] [...] See the last post in this series called “There’s a fine line between good and evil”. [...]

]]> By: ThickenMyWallet http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-169 ThickenMyWallet Fri, 22 Jun 2007 14:13:03 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-169 At the end of the day, leveraging has only the meaning you give to it. For some, it is a great tool. For others, it should be avoided. The point of my post earlier this week is not that leverage is good or bad but you have to look at the context of every situation before attributing meaning to whether leverage is appropriate to one person or another. At the end of the day, leveraging has only the meaning you give to it. For some, it is a great tool. For others, it should be avoided. The point of my post earlier this week is not that leverage is good or bad but you have to look at the context of every situation before attributing meaning to whether leverage is appropriate to one person or another.

]]> By: FourPillars http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-168 FourPillars Fri, 22 Jun 2007 13:00:35 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-168 Q-Cash - I think locking in rates is a good idea. It's also not written in stone that you have to keep the loan long term, if you think there is a good value to be had, you can borrow to buy some stock and then pay off the loan over a few years...or even a few months if possible. Q-Cash – I think locking in rates is a good idea. It’s also not written in stone that you have to keep the loan long term, if you think there is a good value to be had, you can borrow to buy some stock and then pay off the loan over a few years…or even a few months if possible.

]]> By: FourPillars http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-166 FourPillars Fri, 22 Jun 2007 11:58:54 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-166 I think it's important for each person to do a proper analysis on their own situation and decide if leveraging is an option. The example I gave was just to illustrate a point but there really isn't enough information to be able to determine if either person should be leveraging or investing in equities at all. We don't know their age, income, expenses, financial goals etc which are all part of the equation. Mike I think it’s important for each person to do a proper analysis on their own situation and decide if leveraging is an option.

The example I gave was just to illustrate a point but there really isn’t enough information to be able to determine if either person should be leveraging or investing in equities at all. We don’t know their age, income, expenses, financial goals etc which are all part of the equation.

Mike

]]> By: Q-Cash http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-164 Q-Cash Fri, 22 Jun 2007 10:57:24 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-164 My question is this: With interest rates so low now and the possibility for increases in the near future, does it make sense to take out a traditional mortgage and invest the proceeds, thus freezing your interest rates for the next few years, while investing the proceeds? My question is this:

With interest rates so low now and the possibility for increases in the near future, does it make sense to take out a traditional mortgage and invest the proceeds, thus freezing your interest rates for the next few years, while investing the proceeds?

]]> By: TheFinancialBlogger http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-162 TheFinancialBlogger Fri, 22 Jun 2007 09:48:53 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-162 I've been looking at people doing leverage since early 2003 (which was only the beginning of the bull market). Leverage strategies are always promoted. They were definitely less popular in 2000-2001 but still, it was actually the best timing to leverage. With mortgage interest rates so low, I guess most of us can do better than 5% a year (without even counting the tax advantage). Especially if you consider that your mortgage will follow you for a good 15 years (25 to 30 for most people). I’ve been looking at people doing leverage since early 2003 (which was only the beginning of the bull market). Leverage strategies are always promoted. They were definitely less popular in 2000-2001 but still, it was actually the best timing to leverage.

With mortgage interest rates so low, I guess most of us can do better than 5% a year (without even counting the tax advantage). Especially if you consider that your mortgage will follow you for a good 15 years (25 to 30 for most people).

]]> By: Canadian Capitalist http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-161 Canadian Capitalist Fri, 22 Jun 2007 03:12:45 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-161 If leverage is such a no-brainer, why is it recommended for everyone now, after 4 years of market gains and ultra-low interest rates? Let's see how many think it is a great idea in the next bear market. If leverage is such a no-brainer, why is it recommended for everyone now, after 4 years of market gains and ultra-low interest rates? Let’s see how many think it is a great idea in the next bear market.

]]> By: Canadian Capitalist http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-160 Canadian Capitalist Fri, 22 Jun 2007 03:06:56 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-160 I wouldn't call either one responsible because I'd say Person A should use the extra cash to pay down the mortgage and Person B should continue doing so. The reason I am negative about indiscriminate use of leveraged investing is that it amplifies all the behavioural traps investors fall into. It is hard enough for investors to grapple with market risk and stay invested during a down turn. It is even harder when you have borrowed money to do so. I wouldn’t call either one responsible because I’d say Person A should use the extra cash to pay down the mortgage and Person B should continue doing so.

The reason I am negative about indiscriminate use of leveraged investing is that it amplifies all the behavioural traps investors fall into. It is hard enough for investors to grapple with market risk and stay invested during a down turn. It is even harder when you have borrowed money to do so.

]]> By: FinancialJungle.com http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/comment-page-1/#comment-159 FinancialJungle.com Fri, 22 Jun 2007 03:04:14 +0000 http://www.moneysmartsblog.com/theres-a-fine-line-between-good-and-evil/#comment-159 Back when we used to own a house, we borrowed 100% of our investment from HELOC. That's what person A should've done. 100% may sound scary at first until you compare the dollar figure with your overall net worth. If you're worth $400k, and leverage 100% in your $20k portfolio, it's no big deal. Back when we used to own a house, we borrowed 100% of our investment from HELOC. That’s what person A should’ve done. 100% may sound scary at first until you compare the dollar figure with your overall net worth. If you’re worth $400k, and leverage 100% in your $20k portfolio, it’s no big deal.

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