24 Jun 2021
I mean if I make returns then it will be worth it right? Especially when I earn more in return of the original investment amount. Hoping to hear your thoughts. Thank you in advance.
Personally, I would advise you against it. At this juncture, where stock and bond markets valuations are pretty elevated, the risk reward isn't that attractive anymore in my opinion.
Hence, my advice might be entirely opposite. For investors who have borrowed to invest, it's worth considering taking some profit to reduce their borrowings tactically.
Furthermore, if you don't have the ready funds, taking an unsecured loan is typically very expensive and would likely cost more than long-term stock returns.
It's also necessary to think about bear case scenarios when borrowing to invest. If you borrowed to invest, and if the investment drops by 30-50% in value and the lender asks you to pay back the loan, what would be your next course of action?
I do have some data on borrowing to invest in this article link, which you may find helpful.
Hi, contrary to conventional wisdom, I feel that you don't need to have a hefty amount of savings or ultradeep pockets to start investing.
As a beginner myself, I have recently started my financial journey with Hugo Save, a digital account that helps you spend, save & invest, starting with gold. What's great about it is that there is no minimum balance requirement, penalties or paid fees for maintaining a Hugo Account and you can invest in gold for as low as $0.01 and for as long as you want to. The gold in the Hugo Gold Vault is physical gold allocated to the user and is safe.
I hope this helps you to make a better decision on your financial journey.
I borrow to invest.
but it's important to know what's the cost of funds before you invest.
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