Since you have come to the stock market to profit from the money invested. Your money may be less, so the risk is lower. There are many of us who invest in the stock market by borrowing from banks . There is nothing to blame here. However, whether you can afford to invest with a loan.
The money earned from the market must be higher than the interest rate against the loan. Many may be investing in the market by taking loans from banks with many risks, and they are also making profits. So the question is now. When will you invest in the market with a loan from a bank?
If you think you have a lot of money already invested in the market. Some of the shares are gaining and some shares are gaining. In that area you can invest with a loan from the bank. However, invest in a stock, how much money you have to pay and understand how to pay a bank loan. A study in developed countries like the US found that 5% of those who invested in loans from banks were successful. So you have to invest in money from the bank after hearing the buzz.
Regardless of the stock market, it is not a matter of you losing or gaining it, the interest of the bank loan will continue to accrue. The funniest thing is that this interest does not accumulate again on an annual basis, it is accumulated at a compounded rate and four times per year.
For example – if you charge 5% interest from the bank, you only have to pay 5% interest, you will have to pay about 5%. Imagine this time you can earn money by investing in the stock market with 5% interest? That means, with 5% profit for the bank, whatever you have is yours. The bank, on the other hand, does not share your losses. Moreover, there are very few companies in our country that pay more than 5% dividend. Not only in our country but many countries have this bank loan system.
While borrowing money helps a lot in raising the market, it also helps to bring the market down. Suppose all the shares in the market are increasing day by day and then you invested with a loan from the bank. Finished buying the stock and the market started going down. What has grown so much now is decreasing. What are you doing right now? At that point, the sale has to be compulsory and the impact is on the market.
So stay away from such risks as these ordinary investors. Invest in lazy money in your own hands. Keep your investment well. Good luck