Fear Mongers Love To Talk About Margin Debit

Below is a synopsis of this investment report:

  • Record margin debt seems to make the headlines every few months, and fear mongers are quick to point out that this is a predictive indicator of a future equity market crash.
  • Margin debt can exacerbate a sell off, but there is absolutely no statistical evidence that margin debt levels can predict an equity market decline.
  • Although the use of margin debt is never recommended in a conservative portfolio, investors are urged to ignore the rampant fear in such a meaningless data point.


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