I'm a young DIY investor who is looking for ways to consistently implement the approach outlined in the Lifecycle Investing book by Barry Nalebuff and Ian Ayres.
In short, they suggest using moderate leverage in the initial ten or so years of investing to increase market exposure, while salary income can as a substitute for the bond component of the portfolio. They provide a very compelling argument why doing so makes sense.
However, this question is not whether it's a good idea or bad, but how it can be efficiently implemented through deep-in-the money index/ETF options, which can provide this leverage. Such options with the strike price equal approximately to half of the current index value give 2/1 leverage, which I'm aiming for.
Unfortunately, such options are costly, with the cheapest ones I found(like STOXX50 or S&P/ASX200) amounted to about 15000 USD. This makes it really inconvenient for relatively small contributions from my salary. I would need to wait 6-12 months of accumulating cash until I can afford a new option pack. If I would like to include a Japanese NIKKEI, it'll be even worse, with such an option costing around ~70000 USD.
The question is, how can I implement this strategy with smaller invested amounts each month(with 2500USD)? Or at least every other month(5000USD)? I have been looking into SPDR ETFs that track some indexes at 10% of this price, but I haven't found any cheaper yet.