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.
Thanks, Paul!
Doesn't it depend how much the charity is risk-averse? If the charity's value as a function of wealth were completely linear (which isn't true in practice), then these correlations wouldn't matter, only expected income.
I don't understand your last paragraph. Feel free to clarify if it's worth the trouble. :)
Yes, it depends on whether there are diminishing marginal returns to charity overall. But you have made arguments based on the small size of individual donors relative to the large size of the charities they support, and those don't settle the issue.