Planning to put a down payment on a 1M town house (greater Seattle area). I have around $500k in MSFT stocks and don't want to sell, so looking at margin loan from fidelity. Before I progress, wanted to get some late night crowd wisdom. Looking for disclaimer-less knowledge drop around margin loans. I have a couple of other 6 figure "stable" tech stocks from earlier jobs but not as much as MSFT. Is there a concept of margin loan on combined asset? Tc 320k #personalfinance #investments
Margin loan + mortgage? Do they even do that these days? Ask your loan officer
Is the interest rate favorable? How do you plan on dealing with a margin call? Don't go for it unless you can answer these questions. You might be looking for securities-based lending -- iirc margin can only be used to invest, whereas SBL can be used for anything.
IMO, it is a seriously bad idea with the current market volatility and prospects of an upcoming recession. $MSFT was around $220 early in the year. Are you ready for the scenario when it reverses back there within a few months?
Any individual stock could go to zero, so no. Consider diversifying your portfolio. If you had, say, a portfolio of broad based index funds, maybe we could say losses would be limited to like 50% and could calculate a safe amount to avoid a call based on that.
What’s the interest rate on the margin loan? I’ve considered getting one myself, but I haven’t pulled the trigger yet.
I think it’s a bad idea. In one scenario you’re invested in Seattle real estate instead of Microsoft. If you margin you’re doubling your risk making you weak to a real estate or stock crash (if there’s both you’re fucked). Id pick one or the other to park your cash in rather than getting potentially blown out (also why buy real estate when rates at all time high, wait 6 months)
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Margin anything is a risky deal. But if you're OK with risks and understand what you're going into, at least go with IBKR. They should be giving the best rates. You can do acats transfer for your assets from fidelity to IBKR.