Taking a bank loan out for Investing

This is a discussion on Taking a bank loan out for Investing within the Home Trader forums, part of the Trading Career category; Hi, I was wondering if any of you have ever taken a loan out from the bank to sport your ...

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Old May 12, 2007, 11:20pm   #1
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Taking a bank loan out for Investing

Hi, I was wondering if any of you have ever taken a loan out from the bank to sport your trading?

Let me know what you think about it and if it's a good idea.
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Old May 12, 2007, 11:43pm   #2
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As a rule of thumb the advice given with regard to investing and or trading is:

Don't use any money that you cannot comfortably afford to lose.

If you need to borrow money to invest or trade then it suggests that you are not in the best position to be able to afford to lose it.


Paul
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Old May 13, 2007, 8:36am   #3
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I would not do it.

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Old May 13, 2007, 12:37pm   #4
 
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Bullz n Bearz

Never done it. Would never think of doing it. Crazy thing to do, because you are now adding in the loan interest into the equation, thereby adding to the difficulties of making a profit and hence the risk reward ratio is weighted more and more against you.


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Old May 13, 2007, 12:50pm   #5
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Even if you were to get the loan interest free, the moral obligation of having to return the capital would put me off.

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Old May 13, 2007, 2:12pm   #6
 
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Im frantically trawling the net for an article I read in the late nineties about margin trading and brokerage accounts opened by credit cards. excellent article it was, inspiring stuff, probably lost for ever.

Ok, Im going to be a little controversial here and say why not, if a good proven strat is in place, why not have your cake and eat it. No ones going to make life changing amounts from trading unless they are doing it in reasonable size. Borrowed money allows the less well off to play big and strat willing, live the high life........now where's that damn article!

Last edited by Lightning McQueen; May 13, 2007 at 3:52pm. Reason: deleted post title
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Old May 13, 2007, 2:40pm   #7
 
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totally bonkers especially if you're trading on margin too
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Old May 13, 2007, 3:19pm   #8
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Don,

You are talking like someone who has just come on the scene, full of optimism and so sure that everything is going to go your way. I'm sure that you know that that is not so in trading.I started off in trading, already fairly comfortably off and learned, that way, how difficult it is to make a crust in this. Now, getting on in life, experience is telling me not to borrow. Credit cards screw you for 25-35% per year, unless you pay at the end of the month. It's ridiculous! My wife has a credit card, but I have never bothered, except for having a housecard with Corte InglÚs. She drags hers out when when we hire a car, or go on a flight, but cash is king as far as I am concerned and borrowing to trade is, simply, not an option.

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