1 Answer
Borrowing money against a stock portfolio can be done only through a margin and taxable account. For example, if you have a $10,000 worth of stable stocks such as General Electric and General Mills, you are allowed to borrow, depending on the brokerage firm, a percentage of the portfolio typically about 50%. If the portfolio declines in value, you must meet margin requirement by bringing in money to get to the 50% mark, or $5000 of equity. On the other hand, if the portfolio continues to rise, you do not need to repay the margin loan immediately. How much margin loan interest they charge is predicated upon the size of your portfolio, how risky the investments you own is., etc., but typically it's between 6% to 12%.
Note: Brokerage companies do not generally allow borrowing against a retirement account.
| 14 years ago. Rating: 2 | |
kev g
Chiangmai