Investment Bankers
since 1986

Securities Lending Quick And Easy

A popular misconception about financially secure investors is that they have large amounts of spendable money at their disposal.

This is often not true, due to the very thing that makes them financially secure: investments in the stock market take a lot of money and often use much of an investor`s funds.

Sudden financial needs may arise, for which the investor needs liquid funds. When this occurs, he is left with two options: sell some stocks or take out a loan. As long as the investor`s portfolio is sufficiently diversified, and his investments stable, taking out a loan is the far better option. Instead of missing out on potential appreciation by selling stocks too early, or taking a loss by selling at a time when stocks have taken a temporary dip, the investor can take out a loan to address pressing financial matters, and pay it back at a later date using the profits from the retained stocks.

Even if the investor`s stocks remain stagnant over the course of the loan and he is not able to pay it back with profits by the end of the loan agreement, he can still sell some of his stocks to pay it back. This leaves him in the position he would have been in had he sold them to gain liquid funds in the first place. Like anything in finance, stock loans are a calculated risk, but with the bonus of providing short term liquid assets without disrupting long term financial gains.