Altruists who don't care too much about risk (and young people in general) should plausibly use leveraged investing. What's the best way to get leverage?
- Margin borrowing seems like the default solution. I might try it if there's nothing better.
- Theoretically options could be used, but I'm unsure whether they work in practice.
- Supposedly futures offer massive leverage, but I haven't explored the details, and they seem hard to trade yourself. I'd like something I can just buy and hold for a long time.
- Something else?
Ideally, there should be a fund that you just buy into to get leverage, with someone else handling the details. But leveraged ETFs don't work because they're optimized for day trading and as a result lose money for buy-and-hold investors.
If I remember correctly, CEA et al. decided against pursuing this strategy due to risk adversity. Due to the large downsides which may be unique to EA, it's not clear - to me at least - that our personal strategy should differ from this. I'd be interested in seeing some more thoughts on this.
I agree the situation would be different for a single small organization or if the charity you're donating to depends sensitively on your donations.
But if you're just an individual earning to give to relatively big charities (e.g., MIRI, which has a budget >$1m/year), then if you lose, say, ~$20K due to leverage, you can just make it up again with another ~2-3 months of work, and no major harm is done.