LogFAQs > #951019087

Lopen posted...

Cash from your checking account you'd use for your bills, cash in the form of a loan you get spur of the moment

Cash doesn't mean just sitting on something in a savings account.

I guess if the question is "put literally 100% of your liquid worth into the stock market and then 10% margin on top of that" yeah that's not necessarily smart but I'd say the problem there is you putting 100% of your liquid worth into the stock market to begin with as much as danger of your 10% margin call eating you alive. You should always have some sort of emergency line to tap that isn't a stock in case you're in a position where you don't want to sell anything when you need some money

It seems like 90% invested + 10% margin is pretty similar to 100% invested with no margin. Provided you are planning to use that last bit of cash to cover margin calls, it's basically the same except that you are also paying interest.

I mean I agree that it's probably a good idea to have some allocation for cash.

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September 1, 2003; November 4, 2007; September 2, 2013
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