Do people ever short stocks for cash to invest in other stocks?


So the other day I realized that you get the cash at the time of a short sale. I remember seeing bad ETFs that are locked into a cycle of mediocrity because of an overall strategy (VNQI for instance is all real estate except the US…. which is dumb). If someone were to short VNQI and pay the shit dividend, would it be a .6% loan effectively that could be invested in VOO safely since VOO has pretty much always outperformed drastically while VNQI is very stable and crappy?

Obviously not planning to do it because I feel like I'm missing some risks, but I'm curious in any case.


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