On borrowed time
Apr 01, 2020
4 minutes
MARGIN LENDING
Q What is margin lending?
It is a loan facility used to borrow money to invest where the collateral for the loan is generally other investments such as shares, managed funds or cash. Using margin loans to invest can magnify returns but can also magnify losses.
EUGENE ARDINO
Q Who should take out a margin loan?
A margin loan is not something all investors should consider. To properly harness the benefits of margin lending, you need to understand the principles of gearing and you need a plan for servicing interest charges regularly and for avoiding/managing margin calls if they occur.
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