i used to think people who advised against loans to purchase stocks were not serious. so i took a loan to purchase safaricom and i found out why it is an extremly terrible idea. the stock would basically have to almost double just for you to break even!

In retrospect,2009 would have been perfect...the odds were overwhelmingly tilted to your favour...now its getting risky.

i did the same 2years ago and bought East African Cables at ksh 105 per share, and was actually convinced by my stocks broker that its the stock to watch. Am almost clearing the loan, but its a total loss, especially on short term..now they are 25shillings per share....since then, am only sure on property Investment. if u are a short term investor, u might panic coz u don have any control should a bear run come calling.....

Always only buy what you can afford.

You are not serious...

Can you borrow to build a house?

Can you borow to buy a PSV matatu ama Bus ama tractor ya kulima??

Can you borrow to buy a plot??

OK.....centum is an investment company....does it borrow money??

What about other companies.....in their statements.....do they have laibilities??....what are they most of the time??....Bank loans ok??...Do you buy such counters??

Did i read that muguku borrowed some cash to buy his farm??

SO MY ADVICE IS .... YOU CAN BORROW A LOAN ....BUY STOCKS ...... BUT YOU SHOULD NOT CONSIDER USING WHAT YOU HAVE BORROWED FOR ANY OTHER PURPOSE!

BE PATIENT WITH YOUR HOLDINGS AS LONG AS YOU LIVE. SELL THEM ONLY WHEN YOU HAVE MADE MONEY!

Suppose i want 1 million shares of kk @ kshs 10/- and i take a loan to buy that chunk at once then keep paying my loan for the next 5 yrs?.....will kk come down to ksh 5/- or will it reach kshs 20/-??

I am persuaded of the later ... i will borrow.

Tell me of guys who have never borrowed to invest .... not necessarily in stocks???

It is like saying ..... dont put all your eggs in one basket ...... sound familiar and ok.....

But i say ...... put all your eggs in one basket ..... and WATCH THAT BASKET!

Even i bought EA CABLE @ 46 before two years ago & BOC lat year @149 as per my broker advice. now i am buying share as per my research & making money.

@Arusha; What's the hurry? The shares are going nowhere! Keep buying the lots you can afford. You will notice that even if the prices go up, your average will be below the market price.... and if they go down, your loss will also be below the market average....

@arusha...yes you are on the right track. No...the loan option can be tricky. I would not recommend it, though there will be some wazuans and other investors who have made stock money through loans. On stocks to buy...read investing books, understand stock fundamentals, do your research and before you conclude your conclusion search wazua for market sentiments of the stock you are about to plunge into!

Good luck!

I wonder why one would even buy shares with that mentality. You can follow the history and fundamentals of a company and project growth.

@ jerry that is the half fact as we speculate about the future of an economy while we do not have certainity.
@Arusha Please do continue buying small with your savings and do not go for a loan for short term investment as you say to use the proceeds to repay the loan, Safaricom was a classic example and you have heard it from obiero we need not say more.