Hi
I have an IB a/c - never used any leverage before. Thinking of selling some of my ex US Vanguard ETFs which never go anywhere and using 10% of my a/c to purchase VAGS accumulation ETFs effectively with 4x gearing by having a 25% stop loss with 10% of my a/c. The Agg is down c20% so it will have to fall another 20% to stop me out. I think it's extremely unlikely the whole bond market will fall another 20%? Interest rates won't go up to 10%. Based on bond duration of 6 or so years in VAGs every 1% rise in rates is a 6% fall as a rule of thumb. I'm in the UK so liquidity won't be great on VAGS.L but I can't see how I am ever going to need to get out in a hurry.
Anything I should know? I am I mad or is this a no-brainer at the moment? I would never buy bonds normally as they're boring but they're on sale at the moment as far as I can see!
Thanks
Alastair
I have an IB a/c - never used any leverage before. Thinking of selling some of my ex US Vanguard ETFs which never go anywhere and using 10% of my a/c to purchase VAGS accumulation ETFs effectively with 4x gearing by having a 25% stop loss with 10% of my a/c. The Agg is down c20% so it will have to fall another 20% to stop me out. I think it's extremely unlikely the whole bond market will fall another 20%? Interest rates won't go up to 10%. Based on bond duration of 6 or so years in VAGs every 1% rise in rates is a 6% fall as a rule of thumb. I'm in the UK so liquidity won't be great on VAGS.L but I can't see how I am ever going to need to get out in a hurry.
Anything I should know? I am I mad or is this a no-brainer at the moment? I would never buy bonds normally as they're boring but they're on sale at the moment as far as I can see!
Thanks
Alastair
