The Conundrum of using Leverage for Investment

In truth, many GenZ investors are using leverage to boost their returns in stocks. Borrowing or taking on debt may seem risky to some but the potential return may be attractive if done strategically. The key question here is, should investors borrow money to invest in the market? There is no straightforward answer to that question. The decision to invest with borrowed money comes down to comparing the cost of borrowing versus the expected investment returns. Borrowing to invest means investors can deploy a considerable sum of capital either all at once or over a period of time. Using leverage has rewarded investors who bought into heavyweight growth stocks with strong fundamentals $Apple (AAPL.US)$, $Amazon (AMZN.US)$,  $Alphabet-A (GOOGL.US)$, $Meta Platforms (FB.US)$, $Microsoft (MSFT.US)$, $Netflix (NFLX.US)$, $Tesla (TSLA.US)$ that have pushed the $S&P 500 Index (.SPX.US)$ to record highs. A significant risk with this is an investment made with borrowed money may drop in value, which may be of a lesser concern if it is a long term move. The cost of borrowing may become higher than the returns made from it. Additionally, the loan could be exposed to a margin call, where additional funds will be required if the assets fall below the account's required minimum value. Having a potential margin call on an investment account can be a nightmare for novice investors who do not have the stomach for extreme market volatility. Investors should bear in mind that the stock market will not always be in a bullish ascent.  Those who have a tendency to panic excessively when the market drops would find using leverage challenging.  Borrowing to invest may not be ideal for those who may be concerned that the value of their investment would decline in the near time. For those who are taking on debt to invest need to ensure this strategy meets their overall financial objectives and appetite for risk. The decision of whether to borrow to invest comes down to the investor's financial circumstances, goals and needs. Borrowing to invest is more suited for those with a higher risk appetite and proven track record in the market.