Margin Can Make you Rich…or Really Really Poor

What if you could double your returns on a 5% increase in stock price with no extra work? Sounds good right? That is the sales pitch you often hear from some stock brokers when they try to convince the average investor to buy stocks using margin – or borrowed money to purchase investments. When things go well, margin has the wonderful impact of multiplying your gains sometimes to the tune of doubling your returns. However, what brokerage houses don’t tell you is that when things go bad they also can double your losses and take you to the dark side.

Read on (source and credit)

https://www.thedividendguyblog.com/2008/04/30/margin-can-make-you-richor-really-really-poor/