Another way to get leverage in a retirement account is with leveraged ETFs. I am using some of those in my IRA currently. You can get up to 3x for some index ETFs.
I’m still interested in these CEFs for diversification though, how do you find these?
Another way to get leverage in a retirement account is with leveraged ETFs.
Yeah, and another way I realized after I wrote my comment is that you can also buy stock index futures contracts in IRA accounts, and I forgot exactly but I think you can get around 5x max leverage that way. Compared to leveraged ETFs this should incur less expense cost and allow you to choose your own rebalancing schedule for a better tradeoff between risk and trading costs. (Of course at the cost of having to do your own rebalancing.)
Also after writing my comment, I realized that with leveraged CEFs there may be a risk that they deleverage quickly on the way down (because they’re forced by law or regulation to not exceed some maximum leverage) and then releverage slowly on the way up (because they’re afraid of being forced to deleverage again) which means they could systematically capture more downside than upside. Should probably research this more before putting a lot of money into leveraged CEFs.
I’m still interested in these CEFs for diversification though, how do you find these?
SeekingAlpha.com has a CEF section if you want to look for other people’s recommendations. CEFAnalyzer.com and CEFConnect.com have screeners you can use to find what you want on your own.
Another way to get leverage in a retirement account is with leveraged ETFs. I am using some of those in my IRA currently. You can get up to 3x for some index ETFs.
I’m still interested in these CEFs for diversification though, how do you find these?
Yeah, and another way I realized after I wrote my comment is that you can also buy stock index futures contracts in IRA accounts, and I forgot exactly but I think you can get around 5x max leverage that way. Compared to leveraged ETFs this should incur less expense cost and allow you to choose your own rebalancing schedule for a better tradeoff between risk and trading costs. (Of course at the cost of having to do your own rebalancing.)
Also after writing my comment, I realized that with leveraged CEFs there may be a risk that they deleverage quickly on the way down (because they’re forced by law or regulation to not exceed some maximum leverage) and then releverage slowly on the way up (because they’re afraid of being forced to deleverage again) which means they could systematically capture more downside than upside. Should probably research this more before putting a lot of money into leveraged CEFs.
SeekingAlpha.com has a CEF section if you want to look for other people’s recommendations. CEFAnalyzer.com and CEFConnect.com have screeners you can use to find what you want on your own.