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Good Idea to Bet the Farm When Buying on Margin?

If you invest $10,000 in a good stock and get a 20% return, you'll make $2,000. But what if you could have borrowed another $10,000 to buy more stock and doubled your profits?When investors borrow money, or buy on margin, they're going for these types of gains. But the strategy is extremely risky.Buying on margin involves getting a loan from your brokerage and using the money from the loan to invest in more securities than you can buy with your available cash. Through margin buying, investors can amplify their returns -- but only if their investments outperform the cost of the loan itself. Investors can potentially lose money faster with margin loans than when investing with cash.This is why margin investing is usually best restricted to professionals such as managers of mutual funds and hedge funds. To make the biggest profits, some institutional investors invest more than the cash available in their funds because they think they can pick investments that earn a higher return than the...

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  10. MF Global files for bankruptcy after deal unravels

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  11. MF Global Holdings files Chapter 11 bankruptcy

    MF Global Holdings Ltd filed for Chapter 11 bankruptcy protection on Monday, court records show.The filing came after talks to sell a variety of assets to Interactiv...

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    By Rodrigo CamposU.S. stock index futures fell on Monday, following four weeks of market gains, as a spike in the U.S. dollar weighed on commodity prices and dried u...

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