Replies to post #40658 on A.I.M. Users Bulletin Board (AIMUSERS)

[ls7550]

Check out leveraged ETFs...

Love 'em myself.

50/50 2x stock/bond can compare to 100% 1x, but if you diversify the bonds then when it comes to rebalance you can pick the more appropriate choice of 'bond' to reduce/add to

https://www.portfoliovisualizer.com/backtest-portfolio?s=y&allocation2_3=50&endDate=05%2F06%2F2016&allocation4_2=12.5&allocation2_2=50&symbol5=TIP&allocation6_3=50&symbol4=GLD&lastMonth=12&symbol6=SHY&allocation6_2=12.5&symbol1=SPY&endYear=2016&symbol3=TLT&frequency=4&symbol2=SSO&inflationAdjusted=true&annualAdjustment=0&showYield=false&startYear=1985&rebalanceType=1&timePeriod=4&annualPercentage=0.0&allocation1_1=100&allocation3_2=12.5&allocation5_2=12.5&annualOperation=0&firstMonth=1&reinvestDividends=true&initialAmount=10000

For instance if stocks are down and long dated treasury are up, then that can be a better rebalance pairing to rebalance between. Especially if later long dated treasury are down and stocks are up.

Another benefit is liquidity. $50K of 1x, $50K of 2x and need to increase stock exposure by $10K so sell $10K of 1x and buy $10K of 2x. Which enables you to keep 'cash' in the likes of fixed term bonds that more usually pay a higher interest rate.