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Leverage Dangers

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Manage episode 518029367 series 31291
Content provided by Don McDonald. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Don McDonald or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.

Don and Tom take listeners on a wild ride through the booming (and frequently disastrous) world of leveraged ETFs. They break down how these funds promise double or triple the excitement but mathematically bleed away returns through volatility decay. A few listener questions follow, covering retirement cash buffers, negotiating advisory fees on large portfolios, and comparing IRTR vs AOM for a near-retiree allocation. Humor, subtle self-mockery, a Jonas Brothers detour, and a reminder that gambling is not investing.

0:04 Opening banter and the thrill-seeker pitch for leveraged ETFs

1:29 Leveraged single-stock ETFs explode from zero to $40B

3:26 MicroStrategy example: stock up ~30%, 2x ETF down ~65%

5:03 How volatility decay quietly destroys leveraged returns

7:36 5x ETFs and the “go to zero in one day” problem

9:01 When leverage stops being “investing” and starts being gambling

11:38 Listener question: Should retirees hold a bigger cash buffer to avoid selling in downturns?

14:37 Listener question: Should a $4M managed client negotiate fees? (Yes.)

17:43 IRTR vs AOM comparison for someone three years from retirement

22:54 Seasonal weather rant and hunkering down for productivity

Learn more about your ad choices. Visit megaphone.fm/adchoices

  continue reading

1854 episodes

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Leverage Dangers

Talking Real Money - Investing Talk

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Manage episode 518029367 series 31291
Content provided by Don McDonald. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Don McDonald or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://podcastplayer.com/legal.

Don and Tom take listeners on a wild ride through the booming (and frequently disastrous) world of leveraged ETFs. They break down how these funds promise double or triple the excitement but mathematically bleed away returns through volatility decay. A few listener questions follow, covering retirement cash buffers, negotiating advisory fees on large portfolios, and comparing IRTR vs AOM for a near-retiree allocation. Humor, subtle self-mockery, a Jonas Brothers detour, and a reminder that gambling is not investing.

0:04 Opening banter and the thrill-seeker pitch for leveraged ETFs

1:29 Leveraged single-stock ETFs explode from zero to $40B

3:26 MicroStrategy example: stock up ~30%, 2x ETF down ~65%

5:03 How volatility decay quietly destroys leveraged returns

7:36 5x ETFs and the “go to zero in one day” problem

9:01 When leverage stops being “investing” and starts being gambling

11:38 Listener question: Should retirees hold a bigger cash buffer to avoid selling in downturns?

14:37 Listener question: Should a $4M managed client negotiate fees? (Yes.)

17:43 IRTR vs AOM comparison for someone three years from retirement

22:54 Seasonal weather rant and hunkering down for productivity

Learn more about your ad choices. Visit megaphone.fm/adchoices

  continue reading

1854 episodes

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