New Investors Buy Shares with Borrowed Money

[Suba]

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?

 

[Taimoor Jutt]

Yep you are right. To buy or sell shares you should have experience plus enough knowledge about this. You should kniw when and where to buy these and where&when to sell. Newcomers in every field are very confident about anything

 

[chicnthin]

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.

 

[giddy]

The only time it makes sense to borrow money for an investment – known in financial lingo as "invest a loan" – is when the return oninvestment of the loan is high and the risk level of the investment is low. It is inadvisable for an investor to invest a loan in a risky vehicle, like the stock market or derivatives.

 

[Bilal0087]

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?

Absolutely right dear I am totally agree with you. To buy stock and earn profit from it, a person should have proper knowledge and experience about all aspects, but if a person buy stock with borrowed money he cannot become successful.

 

[Goodday]

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?

No, it is not just good we buy stocks with borrowed money or even hot money. In stock investment, there is an element of risk in it and that risk element even becomes greater when the company you are buying the stock from is newly established. Because of this, it's always appropriate we buy stock with money we can afford to lose and whenever the loss arises, we wouldn't be affected much.

 

[btaliat]

I am not after borrowing money to start any business or investment. But I always claim that if you are not sure of the outcome of the business, don't borrow money. If you do that, you will lose at both ends

Post automatically merged: Jan 19, 2021

I am not after borrowing money to start any business or investment. But I always claim that if you are not sure of the outcome of the business, don't borrow money. If you do that, you will lose at both ends

 

[Alexandoy]

I have some friends who are into the trading of stocks. They are the moneyed friends, so to speak, who buy stocks like they it is a hobby. Sometimes they gain a good profit and they admit that sometimes they lose. One topic we talked about before was pawning jewelry to buy stocks on the idea that the particular stocks would bring a big profit. That is a no-no. If the stocks would fail in the expectation then you might lose your jewelry. What more is you borrow money for that purpose, I guess that is not a good idea.

 

[Henrywrites]

It is okay to do this when you have means of you repaying the loans within the period of time that the lender institution asks you to do so. Aside from that, I don't think it is a wise move to borrow funds just for the sole purpose of buying shares that don't have guaranteed means of getting your rewards back. So, this is something that you should really look at to be sure that you are taking the right steps.

 

[Mawome]

I don't support the idea of borrowing money to buy shares in a company, what if the company collapse? how will I pay back the money I borrowed? I can only borrow money if am buying shares in a bank because I know that even if the bank collapse my money is still there,

 

[CeeJase]

That's an unhealthy decision to ever make, buying stocks with borrowed money. What? Do they thing the rise and fall of stocks is constant that they have the mindset of turning around the borrowed money from one sells? What if things go sour and you lost your stock which means you've lost your means of payment?

 

[Hojo]

I won't advice any newbie to try loaning to invest or trade or even trying the margin trade , if you don't understand how everything goes you watch it on YouTube

 

[harrypaul]

I always believe in one saying "never risk what you cannot afford to loss"
I wonder why you would even think of borrowing money to buy shares or even invest in trading.
What if the market doesn't favor you or what if the stock is manipulated.
You have to put everything into consideration.

 

[Nurudeen]

Buying shares with borrowed funds is actually a bad idea to me. If you don't even know how to trade in a perfect way to multiply the money that is definitely another case coming up because you will definitely lose the money

 

[Ub40]

Personally, I don't see anything wrong in borrowing money to start a business or an investment, but one should make sure that it is worth it so that the loan can be paid back with the said business or investment. And one should get all the necessary knowledge about such business or investment before going into it. It is just my opinion.

 

[Yusuf]

This is actually a bad decision from anyone who plans to do it. How can one borrow money to invest in stocks. What if the price of the stock goes down and you can't sell at a loss

 

[Shigobad2020]

I won't advice any newbie to try loaning to invest or trade or even trying the margin trade , if you don't understand how everything goes you watch it on YouTube

It's not adviseable for any newbie to start loaning to invest or start trading or getting involved in a joint business without proper investigation on how to go about it.

 

[tyrim88]

The only time it makes sense to borrow money for an investment – known in financial lingo as "invest a loan" – is when the return oninvestment of the loan is high and the risk level of the investment is low. It is inadvisable for an investor to invest a loan in a risky vehicle, like the stock market or derivatives.

A good business investor would not even try to use his borowed funds to put into an investment that has lots of uncertainties around it.It is not actually a wise decison to take.But if the risk factor is very loww then one can give it a try,but not with all the funds.

 

[justija]

a good investor or trader will never borrow money to invest even though its short term or long term investment

 

[Chizfab]

That is quite risky, and it is one of the qualities of a good entrepreneur. For me, l can only take such steps only if it's worth it and l am sure of not losing in both sides. I would rather not borrow at all and damn the consequences, than borrow and lose people's money.