Most of us would take a huge loan to buy a house and often seen as the “right and sensible” thing to do. Why do investors shy away from using margin loan to buy shares-they are assets anyway and more liquid!! I understand that the interest rates are quite high in India and one may not get higher returns to justify using margin loan.
I am overseas and the margin loan rates are quite low and I am making full use of it. It is not hard to find companies paying higher dividends than margin lending rates and when the $ get stronger I send money to India to invest directly in shares. I leverage to only 30% though – I need to have a good sleep at night.
I am just interested in knowing how many investors actually use margin loan in India.
Thanks in advance