I have personally borrowed to invest at this time. I am selling covered calls and cash-secured puts. The premiums are the highest that they have been in years. As the Sufi poet said, this too shall pass.
In an earlier post titled Variable asset allocation, we describe an aggressive approach to investing, as follows:
“Starting out with your personal market/cash asset allocation, when the broad-based index ETF drops by 10 percent, move a third of your cash into your broad-based index ETF. When it drops by a total of 20 percent, move the rest of your cash over. When it drops by a total of 30 percent, borrow to invest and buy more of your broad-based index ETF.”
Bankers and commissioned financial advisors will encourage you to do that, not only in this depressed market but anytime. They make more. This is just one example of the conflict of interest between Wall St. in its relationship to Main Street.
However, you will find few fee-for-service financial advisors recommending that older people borrow to invest. Emphatically, neither does the Monday Morning Millionaire Program.
Nevertheless, I am doing it. I am confident that the markets will recover even though I don’t know when. When they do, I will repay the money I borrowed and pocket the difference. (I do have five years’ worth of money set aside to meet living costs.)
Please note that the Monday Morning Millionaire Program contains opinions only. It does not provide any investment advice or endorsements.