Is taking out a loan to invest in the stock market a wise investment strategy?
I plan to start making investments on the stock market, particularly stocks that pay dividends on a quarterly or semi-annual basis. The problem is lack of capital means I would have to make investments piecemeal and it could be years before my portfolio could yield any significant returns. So I'm considering getting a loan from a lender that gives loans out in hundreds or thousands of dollars and use that as investment capital. In due course the loan will be paid back but the dividend payments will remain in perpetuity. Can any one let me know if this is a wise strategy? And yes I know you should meticulously research a stock before you buy.
Christin K2020-09-02T14:45:22Z
Absolutely NOT. NEVER borrow money in order to risk it in the stock market. If you don't have capital of your own, you have no business investing in a risky business like the stock market. That's rule #1. NEVER invest money you don't have.
No, it's not wise especially when a lot of people are dying, and getting very sick from the covid, or any other air born contagious stuff that exists.
I do have a lot of thousands of dollars. I could invest in the stock market, but I won't invest.
Why? I don't want to lose what I have. I have no guarantees by anyone that I won't lose whatever I put in, so I won't invest. I don't have any guarantees by anyone that I would make money too, so I am going to stick with a NO.
What do you think is going to happen to you if you don't pay back your loan?
Years you said?
WOW you really are stupid you know that.
If you take a loan then you might end up having an interest that goes with your loan, so you won't owe what you took from someone else. You would owe much more money than what you took from someone else.
My guess is you probably won't be able to pay back your loan, and I don't know what is going to happen to you next.
Over the years, I invested in two different real estate companies. Both eventually went bankrupt. You could possibly earn as much as 5% on a well managed bond mutual fund. Stock dividends might get you 2% to 3%. Go with what is safe until you can build enough to speculate.