Would you borrow money to buy stock in a Bull Market?

Question

Would you borrow money to buy stock in a Bull Market?

Answer 1

I have bought stocks on margin a few times. But I never go over 25%.

AND I have done it only for high yield stocks. That way I protect cash flow. The dividends of that stock and the rest pay more than the interest costs. So I am paying down the debt that way.

BUT you must have a real strong reason for buying the stocks because the interest charge is a huge hit against your return.

IOW, I would be okay, not totally unhappy,  if I only made 7% on a stock in a year but if I bought it on margin with 8% interest it would be a 1% loss and that makes me unhappy.

Answer 2

I'm still new to the stock market but I would have to say "No". Only try this if you are an experience investor and you have nothing to lose.

Never borrow on margin, never buy in a Bull Market.

Answer 3

I would never borrow money to buy stocks in any kind of market. The market can collapse without warning and leave you in the.....

Answer 4

nope -

I can guarantee I know which stocks will take a dive in price

they are the ones I buy

you ONLY invest in the Stock Market - what you can afford to lose

and YOU cannot afford to lose borrowed money

( I bought a penny stock for 4.5 cents a share - they had found oil and natural gas - great for this time YA!

only put $457 into it and got 10,000 shares

When it goes to $2 I will make a killing (and the color flyer said so - really slick 8 pages)

2 months later - the stock consolidated 100 to 1

(layman's translation - I now owned 100 shares)

valued at 61 cents ( laymans $61)

a month later  - was back to 4 cents a share (isn't this where I started?)

(laymans = $4)

two weeks after that - it disappeared

not worth the paper is was printed on

Nope

final answer

Answer 5

If you knew you were in a bull market, yes