Buying on margin is a fairly straightforward, but somewhat dangerous way to buy stocks. Basically the idea is that you buy stock using money that you borrow from your broker.

The broker has your stock as collatoral to force you to pay your debt, and will use the value of your account to determine your credit limit. If you can earn more then this amount through your investment, borrowing is good.

Every book and article on investing that mentions buying on margin says how dangerous it is. Basically it magnifies your returns.

In Canada you can deduct expenses for investment, including interest, which can make trading on margin more attractive.

Therefore if the long term appreciation of this stock is greater than 1. See it on Amazon now.

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Don't Buy Stocks on Margin If the Interest Rate Is Low

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If I buy a stock on margin do I still get the dividend, or does that go to the broker? Yes, you still get the dividend. Dividend Growth Next post: No content on this site may be reused in any fashion without written permission from Money Smarts Blog Money Smarts Blog Privacy Policy.