Anonymous
A relatives wish to invest 10k into Forex currency and gold? Wish to have your all opinion please. Preferred your opinion asap as she is going to borrow the money very soon.
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Billy
17 Jan 2021
Development & Acquisitions Manager at Real Estate Private Equity
If your relative already has a negative balance of 1k after practicing Forex for a year, it means that his/her strategy has issues and if he/she is gonna continue doing the same strategy after borrowing the money, he/she is gonna have to borrow money again in no time due to negative balance.
My advice? Buy into equities or robo's or ETFs, at least you have dividends as well, can help to cushion any losses. However, most importantly is to always invest within your means. Market is unpredictable, but loans are predictable in a bad way - you having to pay interest at a fixed date.
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From the writer: Update the question in here, the relative was used about 2.5k in total as a practic...
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Many people have borrowed to invest before. Many invest on margin and sometimes use leverage as well.
If u study the history of bear market crashes, you’ll see these are signs of bubbles forming.
FOMO leads to greed —> good results —> complacency and over confidence —> any drop in the market is magnified for you
When other people’s stop losses are hit, they are forced to sell their positions, get margin calls and forces the market to plunge lower, faster.
Borrowing to invest is something only for a very small minority, and if you have to ask, it’s probably not great for you