Hilary Kramer Warns of the Dangers of Margin Debt
Hilary Kramer, A&G Capital president and CIO, commented on the pitfalls for investors as buying stocks on margin reaches levels causing concern. The Wall Street Journal reported “small investors are borrowing against their portfolios at a rapid clip, reaching levels of debt not seen since the financial crisis.”
Kramer said she knows of investors paying credit card debt with borrowings against their stocks. They don’t want to sell their stocks because they don’t believe they will ever go down.
Kramer warned of the imbalances being created via currency manipulation by Japan and the U. S. which could cause a stock market drop. Brokerages would automatically sell client’s stocks if they can’t come up with cash to fortify their equity, she added [see video below].