Hi,


I was just after some comments/advice about this idea.


Say the average market return is 13% for the purpose of this description (8% growth 5% yeild).


Seeing as Margin lendings rates are around 7 or 8% I would obviously be doing very well if I could borrow at 7% and make %13. The only obstical is volitility even something like a managed or index fund can fluctuate around enough to make this a risky exercise.


I was wondering if it would some how be possible to diversify my holdings to such an extent (overseas index funds, property trusts etc) that I can be almost assured that my yearly returns end up with in a narrow range, say between 11% and 15% and have minimal fluctuations. Mabey I have to settle for a slightly lower return to achive this say 9%-11% but as long as its above the margin lending rate and there are only small fluctuations then the principle is good.


If I could achive this then I could confidently use insane levels of leverage and do very well. I could for instance borrow money off one source and then put this up for 80/20 lending with a margin lender. So I end up putting up no money and then taking the difference between the market and the lending rate.


This brings me to my next question. If the market averages x% and it's really hard to beat the market then couldn't somebody beat x% quit consistantly over time by just using conservate leveraging.


Shouldn't it just be a walk in the park to beat a figure like 13% ??


Comments ?