This way, you will never get a margin call.
2007-01-20 12:59:37 · 6 answers · asked by Anonymous in Business & Finance ➔ Investing
If your plan is to invest using a marginable strategy and you can get a personal loan to do so then by all means do it. brokerage firms provide a margin amount for you to use based upon a formula. That number may be larger than your loan.
it really depends on the type of investing you plan on doing and at what rate you can secure your loan versus the rate from a brokerage firm
2007-01-20 16:51:37 · answer #1 · answered by Kenneth H 1 · 0⤊ 0⤋
1
2016-09-28 12:19:46 · answer #2 · answered by ? 3 · 0⤊ 0⤋
Interesting question.....
my current margin rate at tdameritrade is about 9.5% interest, if you can get a loan else where, it might be a good idea.
margin calls actually work in your favor, they insure that the amount you borrowed is properly backed up by an asset (the shares of stock). If the stock starts to go down and you don't cover the margin call, you can either start to liquidate some stock or they will do it. To get a loan from another source, if it is unsecured and your stocks go down to zero, you are stuck with a loan that has no underlying asset.....
hope this helps answer your question....
2007-01-20 13:42:38 · answer #3 · answered by cambridge007 2 · 0⤊ 0⤋
The interest on personal loans is about twice what it is for a margin loan -- so no, it wouldn't be better.
2007-01-20 14:14:43 · answer #4 · answered by Ranto 7 · 0⤊ 0⤋
Generally speaking if you don't have the $ don't take out a loan for investing. Some may disagree but that is the straight-up answer.
2007-01-20 13:26:22 · answer #5 · answered by 4x 2 · 0⤊ 0⤋
No.
2007-01-20 17:52:02 · answer #6 · answered by Anonymous · 0⤊ 0⤋