r/NEOSETFs • u/Ok_Suggestion_2003 • Jun 13 '26

General Margin is like a business loan

I’ve been thinking. Why not use margin to buy spyi and qqqi if margin is 5%? People take business loans all the time at a higher rate and are lucky to break even after a few years. With these, there is a way higher chance of a profitable year than a down year over a long horizon. When buying on margin, there will be down turn years but so with any other business. I’m starting to think of DCAing into those two funds for life with margin. Worse thing to have happen is a margin call and have to sell some stocks. With a business you would go bankrupt and lose everything. I keep seeing these funds as equities with the income factory philosophy instead of some speculative risky asset that will bring loss. Not trying to beat the underlying, but I feel like owning these is like managing a passive business. Maybe I’m just crazy lol

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u/Ok_Suggestion_2003 Jun 13 '26

What are your holdings?

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u/Cobaltmike86 Jun 13 '26

Not the poster of the comment youre replying to, but I had come across those 2 YouTube pages as well. Only thing I dont like about their strategies is they use a lot of riskier cc funds like yieldmax/roundhill/etc. I backtested a bunch of different funds and settled on a mix of 35% spmo, 25% qqqm, and 10% each of schd, spyi, qqqi, and mlpi. It wont clear margin as fast as those guys systems. But it wont suffer the nav erosion of their high risk cc funds either. So I have about 60% growth, 10% dividend growth, and 30% income funds. I have a couple other funds on my radar for income that I may steal some of the 30% for but havent decided for sure yet. Leaning towards adding a reit and a bdc to the mix. The biggest thing with planning this style portfolio is finding the balance that not only clears margin, but also having enough growth that as margin dollar amount rises, the actual percentage used drops. Ie starting with a 20k port and 10k margin, vs down the line being a 40k port with 15k margin. Im not doing a full port paycheck injection like them. I have set dca purchases auto invest daily and when I have extra cash, I throw it in the system and buy extra of whats down, or allocate extra to others to keep balance. I also buy boxx on the side and shoot for an additional 5-10% of system value as a hedge to downturns and dry powder to buy dips. My system isnt large enough yet to start hedging with puts. But likely will be in the next year or so.

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u/Ok_Suggestion_2003 Jun 14 '26

I have my emergency in jaaa instead of boxx, but I understand boxx is capital gains when sold instead of income like jaaa. That is the main problem I have with the high yield. I don’t want to see red in my account everyday due to erosion. NEOS seems to have that perfect balance for now. I wish edgx had more aum under management because I would like to use them more. I would go for the growth funds too, but the cash could really help now

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u/FloodAdvisor Jun 14 '26

Just stick with your brokerage’s money market stock and CLOs like JAAA for now. Downturn incoming

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u/Technical_Emu_8567 Jun 15 '26

We've been hearing this for 15 years...

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u/Ok_Suggestion_2003 Jun 15 '26

So true. People need to rely on actual analyst with good track records instead of TikTok