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Technicalities. For me leverage is any kind of a bet that "I'll be able to support this situation". There's no practical difference between a "brokerage margin

• mardifoufs 7y ago
  But that's literally not what leverage means. Selling stock because you need money is easy and to be honest, a 20% drop is really not that bad. Stocks are still super liquid right now. Also, investing in corporate bonds, "safe" mortgage REITs, foreign bonds, which are all usually considered to be safer than equities would have caused a much bigger loss. All things considered, equities are holding up quite well. Unless you think they should've been in cash, but it would've been weird to miss years of good returns just because a black swan event could happen That's why saying leverage isn't just "a technicality" at all. Being leveraged means that you could have lost everything with just a 20% drop. You can't just ride it out if you get liquidated because you couldn't meet your margin calls. See, I don't know how such a "mild" drop would affect most people in the short/medium term unless we are assuming they have to cash out most of their portfolio or are retired. But that's not the case with leverage. There's a big difference between -20% and -100%
  • H8crilA 7y ago
    Yes.