Margin Loans Who still does margin loans?

Discussion in 'Sharemarket Investing Platforms, Tools & Services' started by Simon Hampel, 27th Oct, 2009.

Join Australia's most dynamic and respected property investment community
?

Do you have a margin loan?

Poll closed 26th Nov, 2009.

  1. Nope, never have, never will

    3 vote(s)
    16.7%

  2. Don't currently, but am considering it

    3 vote(s)
    16.7%

  3. Not yet, but I will definitely soon

    2 vote(s)
    11.1%

  4. I have previously had one, but don't right now

    2 vote(s)
    11.1%

  5. Yes, I'll keep using my margin loan

    7 vote(s)
    38.9%

  6. I do have one, but I'm not sure I'll keep it

    1 vote(s)
    5.6%

  7. What's a margin loan?

    0 vote(s)
    0.0%
  1. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,415
    Location:
    Sydney
    With the incredibly enthusiastic reception for my new margin loan simulator (*sound of crickets chirping*), I started pondering whether investors are now a bit gun-shy and reluctant to borrow to invest in shares and funds?

    Thought I'd start this poll to get some feedback.
     
    Simon Hampel, 27th Oct, 2009
    #1
  2. davo6253

    davo6253 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    68
    Location:
    Melbourne, Victoria
    Hi sim, had been meaning to post about your margin loan simulator very useful tool, can't wait to see it with a few more features! I am personally looking into margin loans in the short to medium term.
     
    davo6253, 27th Oct, 2009
    #2
  3. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,415
    Location:
    Sydney
    I would be interested to know if there's anything specific you'd like to see it be able to do.
     
    Simon Hampel, 28th Oct, 2009
    #3
  4. Chris C

    Chris C Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    904
    Location:
    Brisbane, QLD
    You'd have to think that average mum and dad investors who had margin loans prior to the crash will have been burned fairly badly to the point where they will probably steer clear until the world is well and truly out the other side of this global slowdown.

    Though with that said I was utterly amazed to see how many people said in the poll that they will still be using their margin loans. Though I guess people on these forums are much more investment savvy and I assume also would stay on top of their investment much more justifying continuing to use margin loans as they invest.

    Though I would have like to have seen the option in the poll, "not right now, nor will I for the foreseeable future", which would have been me saying don't have one, but am not writing off the notion that a couple years down the line I might conclude that a margin loan may produce better returns.
     
    Chris C, 28th Oct, 2009
    #4
  5. davo6253

    davo6253 Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    68
    Location:
    Melbourne, Victoria
    Sim, from what you mentioned in your initial post about your future plans it sounds the full feature program will be an extremely useful tool. One thing that might appeal to me would be a feature to allow you to select some different examples to allow you to view how a margin loan effects your investments, so that a new person to the simulator would be able to view a few examples like the one you provided already without having to input detailed data to work out what benefits / negatives a margin loan can bring. Obviously with different investments this would probably be of greater use.

    Chris, I think if the poll was taken in march / april the results even here would be quite different, since the rebound I have noticed the attitude of people toward the share market shift back to it being seen as an investment with big upside, herd mentality etc. Also as the poll is taken on an investing forum of course stats will be to the say the least dodgy as everyone here is obviously actively involved or at least interested in increasing their wealth.

    Cheers,
    David
     
    davo6253, 28th Oct, 2009
    #5
  6. Simon Hampel

    Simon Hampel Founder Staff Member

    Joined:
    3rd Jun, 2015
    Posts:
    12,415
    Location:
    Sydney
    I deliberately programmed the simulator in such a way that it would be very easy to reproduce a scenario - I am in the process of writing a series of articles about margin loans which will reference the simulator for examples of the implications of various decisions on investment returns in a variety of market conditions.

    It will only take a modest effort to add other funds to the simulator - but I'm not sure which would be worth adding. I certainly won't be adding more than a couple of funds (or perhaps a couple of other ETFs) - I'll leave that up to Compare Funds to cover all the options.

    One thing I don't have yet (this will be in the more fully featured version) is the ability to simulate a "portfolio" of investments so you can see things like the impact of a more conservative fund lowering the overall portfolio volatility and such.

    If anyone has a suggestion for a fund or ETF they think would be useful to show in this version of the simulator, I'd be interested to hear your reasoning.

    I'm thinking I'll just choose a couple of representative funds ... a small cap fund, an international fund, a balanced fund, etc. I'd only need 4 or 5 to give a bit of choice and to cover most scenarios. Ideally I would want funds which have a decent trading history so I can find data from most market conditions to use in examples.
     
    Simon Hampel, 28th Oct, 2009
    #6