Warren Buffett Doesn't Borrow Money to Buy Stocks, and Neither Should You
Warren Buffett has spent most of his lifetime making money on equity investments. You would think after decades of success, he'd have the confidence to buy stocks with borrowed money. After all, investing with borrowed money is a common strategy for amplifying gains.
There are hundreds of leveraged exchange-traded funds (ETFs) on the U.S. stock exchange, for example. These ETFs attempt to double or triple the daily returns of an underlying index by using debt and financial derivatives.
Individual investors are in the leveraged game as well. One Yahoo Finance-Harris poll suggests that 10% of investors have borrowed money from their brokers to buy stocks.
Source Fool.com
