Loans

[geezy]

Is it wise to get a loan to invest in shares? With interest rates sitting @ 9% ++ , how does one keep up with the repayments through purely share investing (non traders)?

Would love to hear from you guys

[shasta]

Is it wise to get a loan to invest in shares? With interest rates sitting @ 9% ++ , how does one keep up with the repayments through purely share investing (non traders)?

Would love to hear from you guys

By loan do you mean via a personal loan secured against property, or a margin loan?

[peat]

Generally accepted thinking is that it is not wise to borrow money to invest in equities. One of the reasons for this is that listed companies are (mostly ) already borrowing money to operate. so by leveraging yourself into ownership of a leveraged entity you are overdoing things.

But of course it all depends on your ability to accept and manage the risk you are taking. An experienced trader/investor may be able to control the situation and benefit from the increased capital under their control to increase the returns on their own funds , whereas a novice may end up not only losing their own money but someone else as well (which of course will need to be paid back) It would certainly be prudent to have clearly defined cut off points in leveraged trading to prevent losing even more money than you have
One doesnt want to end up in debt with no equivalent asset to match that debt.

[ENP]

Too much risk for me!

[shasta]

Too much risk for me!

I've used margin lending extensively in the past, but i've been around long enough to know how to use it effectively.

It's a bull market leverage strategy, & you have to sell down, or pay off any debt during the bear markets & have cash ready for the next upswing.

It's another tool like shorting, options, warrants, CFD's, ETF's, etc etc

Peats' right though, if you aren't disciplined & risk tolerant, then i wouldn't advise you to do it.

It fits within my risk v reward profile.