What is your current performance delta compared to unlevered funds?
1.875x, although I just started the strategy earlier this month so it’s hard to say.
My boss has been using levered ETFs for his personal IRA for over a year and claims a performance delta of about 1.8x compared to the unlevered version (he’s doing 60/40 using levered ETFs.)
lol nice to see everyone thought process in this. I’ve asked myself this question as well. In my opinion this is how you should throw down:
Roth IRA/Roth 401k: High yielding investments (preferably fixed income), because these would ordinarily be taxed as OI, which is higher tax than cap gains tax, they will go tax free in this scenario. Think fixed income, p2p, high yield stocks.
IRA / Trad 401k: active mutual funds / high risk equities / fixed income if you want more exposure, these assets are contributed pre tax, so any downside that cannot be written off have at least been invested pre tax. Additionally, mutual funds typically pass cap gains tax to their owners, with a 401k you become exempt. Think large cap, value, active, equities.
Regular Taxable Investments: Best to go with a basket of ETF’s that you never sell and hold to perpetuity with low yield rates. Also, at these rates, I would lever with margin here. Interactive brokers ftw. Think small cap, growth, passive, equities.
Roth and Trad are really interchangeable. But high risk single equities, and active managed funds, is prolly best in a pre tax acct. Since if you lose in a roth, you cannot claim a deduction.