New Investors Buy Shares with Borrowed Money

[Toyoabasi]

Currently on social media there are pieces of complaints from investors who are desperate to buy stocks using hot money, (not idle money), be it borrowing money from family, friends or online loans, using office money, some are pawning land certificates and cars. The main factor causing this is that they are too confident that they dare to borrow money just to buy shares because they (new investors) do not have knowledge about stocks, of course they will end up in losses. There is a lot of discussion about stock recommendations on social media and they (new investors) are trapped by influencers who recommend stocks (even though they do not directly invite them to buy stocks), but influencers show off their portfolios with big profits, so that new investors are interested in buying shares even with the money from the loan. What do you think, is it natural for us to buy shares with borrowed money?

Buying stocks with borrowed money? What if losses are incurred? I don't think it's advisable to buy shares with borrowed money especially when you're not even garnered with enough knowledge about stocks.

 

[greenie]

I've also seen a lot of comments wanting to try it because a lot of influencers have earned big amount of money. Any person who wants to earn would find it enticing. Too much that they are being reckless about it. What they're doing is risky if they don't have any knowledge about it at all.

 

[tyrim88]

I think these things is all about the social and media buzz,because an outsider cannot see the market very well untill he has entered into it,it is actually a bad idea to invest in the market with borrowed funds.

 

[Treborika]

The buying and selling of shares business is like an other business out there as long as it relies on the profit making regime. Therefore it's not advisable to start any business with a borrowed money or loan from financial institutions whatsoever.

 

[frederick_9]

Only when the return on investment of the loan is high and the risk level of the investment is low does it make sense to borrow money for an investment, also referred to as "investing a loan."
An investor shouldn't put their money into riskier investments like derivatives or the stock market.

 

[Ofonime6]

Its not really good for someone to buy shares in a company with borrowed money its far more risky why am saying this is that what if something happen to the company and they gone you will put yourself in a serious debt so I think that you need to work for your own money use it to involve in the financial transaction of owing some unit of share with the said establishment

 

[Syldan]

Personally I think investment in stocks with a borrowed money, is absolutely a diaster and I won't advise anyone to do that. the value of stocks are not stable so you can lose or succeed in your investment.

 

[tyrim88]

When it comes to the issue of investment,especially in things that has to do with trading like stock and commodities,it is not very advisable to use borrowed funds to invest in such venture,because there is always the factor of uncertainty in such venture.