BORROWING AGAINST YOUR PORTFOLIO
Margin lending gives investors the option to borrow against their existing securities, so they can invest more than they’d otherwise be able to.
USING YOUR PORTFOLIO’S EQUITY
If you decide to use a margin lending strategy, you will get a load (up to a certain level of your existing investment portfolio) that uses your portfolio’s assets as security.
THE BENEFITS OF MARGIN LENDING
With a margin loan facility, you can borrow funds from your existing portfolio to buy more shares. Making it a great way to grow your wealth using what you have already built.
Considering the risks
Margin lending isn’t right for every investor, and you will need to think about your tolerance for risk before making a decision (since there is a potential for loss, as well as gain). It is important that you only borrow what you can afford, and what you are comfortable with – so you can make regular interest repayments to keep your loan balance manageable.
Keep an eye on your portfolio
The value of shares can change quickly, so you will need to monitor your margin loan portfolio closely. Make sure you are regularly checking the loan-to-value ratio, and be aware of any changes that might make your portfolio healthier.
How Hobson Wealth can help
Margin lending is a sophisticated way to invest, with higher potential risks than other investments. So it is a good idea to talk to an expert, like a Hobson Wealth adviser, before you make a decision. They will explain everything and talk you through the benefits and risks involved in detail. Then, if you decide to go ahead, they will guide you through the process, and can help you manage your margin lending account in the long run.
Margin lending is subject to the provider’s terms and conditions and approvals.
How can margin lending help grow your wealth?
With a margin loan:
– you will have more funds available to invest
– you can use the income of the acquired shares to offset your interest payments, which could help you save on tax too
– you are able to re-weigh or diversify your portfolio without selling down
– you can grow your portfolio without having to draw on other assets.