INVESTMENT IN SHARES WITH BORROWED MONEY
While the stock market is in a bearish mood, nobody will think of investing money in shares and every one will be in a very disguised mood! The existing investors are in a pathetic mood. And the new investors who want to invest in a scaring mood!
It is a different situation, while the market is in a bullish trend. There will be a lot of euphoria and every one is eager to invest in the share market. While a new investor in a lingering mood whether to go for investment or not, the friends and relatives inspire them and they go ahead. Even if there is no money right at that moment, they think of lending some money.
There strikes to their mind, the word, "loan"! There is availability of money from the banks at cheaper interest rates today. The investment in the stock market today would fetch me a lot of money with multifold retunrs. So even the money lent at 15% would earn me at least 85%. They think in this way and run to the stock broker. Some think that the investment gold would not fetch and opt for the stock market. Some panic people go even for the mortgage or sale of their properties like home and site! They think they would buy a ten times valued building or site on gaining the bigger gains from the makets and enter the stock market on a fine day!
But out of the people who enter the market with this attitude, only a very few out of them gained so far. In fact, the basic thing they have to remember is to pay off their loans on gains. They should not transform their gains again into shares. The greediness is the biggest enemy for an investor and sees the end of him finally! So while you play with the borrowed money you have to take utmost care in investing into shares. Always better to keep stop-loss to secure the borrowed money. If you dabble with your own money, it is different! Even it is your own money, that should not disturb your daily needs.
And do not run after markets while they are in a fast running uptrend! Wait for the most pathetic mood mentioned earlier and go for buying! Buying in a systematic way, ie., in a staggered manner will see your returns really wonderful. And you would be in a safe position. You lead your investment but market should not lead you! Always remember these! Happy investing!
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