....so in case y'all sceptics have been wonderin'...Quote from: "Yer Pal Joe"
It IS possible to lose your SHIRT or LIFE'S SAVINGS in the stock market at A MOMENT'S MOTICE without even trying.
I'll tell you the Coles Notes version of what lead up to the '29 crash, which is often absent from most examinations of that...
Let's say the bank will lend ANYONE money @ 5%. Now let's say the stock market paid out 10%, to anyone.
You can see what was being created here, in this scenario.
Farmers, you name it, were getting 5% loans easily, simply to reinvest that in shares that paid 10%. It was FREE MONEY, to everyone, and times were great.
The roaring 1920's was a great era, actually. It is what kept Germany from retaliating for the bullshit Treaty of Versailles for a decade, actually!
I digress...
It was all built up upon nothing. When the Farmers and Labourers and the everyman was called to pay back their loans, they couldn't. The market dumped. Their assets were worth 1/2 of what they just were, but they still owed the full amount of their loan back to the bank.
And it devastated the World for 10 years. Making money out of nothing is never a good idea.
My own personal opinion? Avoid debt. Nothing wrong with investing, as it's generally a sound model, but avoid being indebted if doing so.