The pros and cons of buying stocks on margin

The pros and cons of buying stocks on margin

When buying stocks on margin, you’re essentially borrowing money from your broker to buy securities.
Understandably, the main cost involved in buying stocks that way is the interest you pay. Plus, when you sell a security that you’ve bought on margin, you must first pay back the… Read More

The pros and cons of buying stocks on margin

From time to time, investors ask us questions to which there is not a simple yes-or-no answer. One of these is whether buying stocks “on margin” is a good idea. That is, should investors borrow money from their brokers to buy securities?
This strategy is… Read More

I am retired and live off the distributions and dividends from my portfolio. What do you think of using a small amount of margin to buy some more dividend paying stocks? The yield on some pipelines and banks is higher than the interest rate on the margin loan. (I am thinking of, say, using just 20% of margin available.)

If you could buy on margin when the market hits bottom, stay margined as the market rises, and sell out at the peak, you could very quickly acquire a measurable proportion of all the money in the world. Nobody ever succeeds in that, of course… Read More