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Leverage sensibly for stock investment
Lim Siew May | 06 Oct 2017 00:30
The best time to buy shares with borrowed funds is when the market crashes and value emerges – 123RF
When buying a property, it’s almost a given that we need to finance this big-ticket item with a loan unless you are flush with cash. But when it comes to another popular asset class like shares, most people frown on the idea of taking a loan.

This is not completely unfounded, given that leveraging to invest in a more volatile asset is not for the uninitiated. On the flip side, with the right approach, stocks are arguably the most lucrative asset class over the long term. 

When combined with the power of leverage, it can accelerate wealth creation.

So, what’s an investor to do? By and large, most of us should not borrow to buy shares, says David Poh, founder of Spiral Thinker Alliance, a collaborative alliance that promotes intelligent value investing and financial and investment literacy among youth.