Summary: As interest rates on loans fall and share market yields remain strong, perhaps a little extra risk is worth considering. A hypothetical $100,000 portfolio could return $1000 more in dividends than the cost of borrowing. A higher-yield portfolio could perform even better.
Key take-out: If you are considering borrowing to invest, make sure your strategy can cope with a market downturn of 50% or more. Also make sure to have a plan to pay off the loan over time.
Key beneficiaries: General investors. Category: Shares.