Basically several question you need to ask.
What is the odd chance of your share make more than 50% in 5 years time?

What is carefully selected stocks? How do you know the stocks are "carefully selected"?

I offered several scenario that potential happen after 5 years.

1. Stock up more than 50%, so you have a net gain from it. OK, congratulation.

2. Stock up 50%, you are working for banks with high risk you are taking. You gain nothing out of it. You become the slave of the banks which working free and generate profit to the bank.

3. Stock up less than 50%, you have a net loss and gain in stock not enough to cover the interest

4. Stock doesn't move, ended up with loss of interest

5. Stock goes down, doom, double loss = loss of interest + loss of capital

Ordinary people using cash to buy stocks, they just need to make sure the stocks making a gain more than FD rate is considered a gain already. While for you using loan money, you need the double effort.

If you don't know what you are doing, sorry, no go is my advice.
As if you know, you won't be asking this question already. No offence.

Using margin or loan money to make investment, unless one is making calculated move and anticipating potential risk of it, otherwise, my opinion is better don't, as it just means you don't know what is the risk you are taking.

My 2cents.

This post has been edited by cherroy: Apr 25 2009, 10:42 AM