Lets Talk About Margin...
I throw $650 a month from my salary into SPY. I figured this is a great strategy and over the long run, it's worked fine.
However, the siren song of margin is calling to me...
It seems like I can take around a $150k loan for around the same $650 a month ( $620 @ 4.96% rate). The payment would only be going towards interest but still, the principal would remain in the account invested in SPY.
If the LTV is 27% is this really that risky? I figure there's basically no way outside of WW the 3rd that I could be margin called. Additionally, $650 a month is pretty manageable...
Question for the community: is this is a bad idea and I should just continue buying shares directly or am I sufficiently covered, can't go tits up, and general recommendation is: sure; thumbs up?
Appreciate it!