Michael Wursthorn
speaker
1,567 appearances
29 recordings
1 series
first heard Jul 2017
last heard Nov 2021
Michael Wursthorn’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
WSJ Your Money Briefing · The Risks of Margin Borrowing for Everyday Investors · 30 Nov 2021
podcast
When you have markets going up the way that they are, it can create this perception that markets can only go up.
And that's why you do see these sharp increases in margin debt borrowing during times such as this.
But the Federal Reserve has noted that there are some risks here, specifically as it relates to younger investors.
They identify that younger investors tend to be much more leveraged than most other investors.
And we've seen that sort of play out to a large degree with some of these meme stocks when it comes to AMC, GameStop, for instance.
There's this frenzy almost where traders talking online with each other, whether it's Reddit.
Twitter are sort of inflaming some of these particular stocks.
And in a lot of cases, the Federal Reserve found they're using borrowed money to play off these situations.
What the concern is there is that if we do run into a bout of turbulence for the market that's sustained for a period of time, these investors are really going to face the brunt of being overexposed more than anyone else.
And the follow-on effect there too, of course, is that these younger investors, they're in a position where they don't have nearly as much net worth as other people do, as older people do, say, for example.
And that can have a significant long-term effect depending on how much they lose in terms of their own wealth creation, their own financial security.
So the Federal Reserve is watching this area.
They are concerned about those younger investors.
And I think it just adds to this overall environment where there's a lot of cheap money that's easily available through debt, and people are using it, especially younger investors at the moment.
So the biggest reason most investors do this is because they want to juice their own returns.
And as opposed to, say, putting more of your own capital at risk, more of your own money, margin debt always looks like, say, an attractive option, especially during periods like this.
So they're
are a number of investors I've spoken with who've said simply because the market's higher, they want to partake in those gains and really achieve gains even higher than what, say, the market's giving them.
They look to margin debt for that factor.
So one investor I spoke with, he says that he's trying to achieve 100% return every single year.
Showing 41–60 of 1,567 · page 3 of 79
← Previous
Next →