[Premium] Portfolio Update May 2020 and my $1.4 mil leveraged portfolio

I would like to do more of complete portfolio update, as I realise that my past updates were abrupt and messy. Actual statements were shown, without much background and explanation. This should be a good update to be more understandable to both new and savvy investors. I’m actually not fully…

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16 comments

    1. Hi I go through my bank and brokerage and they will put up the application for me. They will extend the credit when I make a purchase

  1. is 2.5% the market lending rate?
    so, buying bonds with >2.5% will provide a nett yield of ( X – 2.5%)
    if i an conservative, what type of bonds should i be looking at?

    whats the worst case scenario? i lose everything?

    1. Yeah 2.5% should be around the market rate. If the bond coupon is less than 2.5%, it doesn’t make sense to leverage that bond.

      If you are conservative, you can look at investment-grade corporate bonds. I think there are still decent yields at around 4% for fairly safe bonds. This can go up to at least 6%, depending on how much you leverage

      Worst case scenario is that you lose everything plus the bank’s loan to you, which can be 2-3 times your initial capital. But bond defaults outside of the junk bond space is rare la

  2. Bro,

    those bonds are SGD250K a tranche. Impressive.

    Sorry I didnt understand the first part. Your leverage is based off cash holdings and u bought those bonds ? 2.5x ? Able to share more details?

    Rgds.

    Lionel Siau

    1. Thanks bro. Leverage is provided from the bank or brokerage. You would need to put up about 30%, and they will provide the other 70%. So typically need about $80,000 to start. The RM will arrange everything, you just need to create an account with them. They will also provide you a list of possible bonds based on your risk profile.

  3. Portfolio financing may be an alternative too. Biggest difference is that you can move the funds from the financing out of the bank rather than only invest via the bank that is providing the financing as each bank is handicapped by the limited choice from only the insurance company and fund house that they are working with.

    Funds can be used to offset other loans that has a higher interest rates…

  4. What kind of loan do u take to leverage? Iā€™m
    a noob in finance but googling shows that I can only use credit card balance transfer ? How to qualify for the type of loan u have? I would love to borrow ya 2++ % to invest

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