It doesn't matter much what you do, because your assets are small and will increase soon.Hi all,
I've been reading about (m)HFEA for a few months, and have recently started to implement it. I would like to hear some thoughts on my plan. I'm a good candidate for leverage, I think: young (early 20s), grad student, saving 1.5k per month now, expect my pay to go up significantly (by a 5-10x multiple once I graduate in 3 years, since I'm in STEM).
I currently have ~25k in my IRA and taxable, and am 100% HFEA (55 UPRO - 45 TMF) in both. Here are my questions:
1. Can I reduce my expense ratios (~1%) somehow? I understand that LETFs are inefficient compared to box-spreads and futures, yes, but with my small ticket amounts, I reckon its impossible to buy futures easily.
2. Can I make my taxable any more tax-efficient? I plan to switch to the classic box spreads/futures once my income goes up, but it probaby doesn't make much sense now.
3. Do you have any other advice for someone young, starting out and leveraging?
Thanks!
However if you want to play, you could for example buy and periodically roll one SOFR future for example 12 or 18 months out, which has a duration equivalent to about $50k worth of 5-year duration ITT, in both the IRA and the taxable.
You could use the micro futures MES in the IRA.
You could probably even use a nice mix of MES, Stoxx Europe 600, and/or Nikkei 225 futures, without being overleveraged.
You could also scrap the LETFs in both accounts, and use box spreads worth about $25k in your taxable along with ETFs or individual stocks. (I don't use ETFs in taxable.) (Probably slightly worse implied rates than for $50+ spreads, but not by that much. You could try longer box spreads like 6 months out instead of quarterly, to dial in the implied rate more accurately.)
In short, I think you can start your mHFEA with your account size.
Statistics: Posted by comeinvest — Thu Aug 22, 2024 9:22 pm — Replies 3188 — Views 734496