Investors are borrowing a record amount to bolster their stock portfolios - and it's raising red flags reminiscent of the period before the Great Financial Crisis
- Investors are borrowing a record amount against their investment portfolios, according to
margin debtdata from FINRA.
- At the end of February, investors had borrowed $814 billion against their investments.
- That's a 49% year-over-year increase, representing that fastest jump since 2007.
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A record surge in
Investors borrowed $814 billion against their investment portfolios at the end of February, according to data from FINRA cited in a report in the Wall Street Journal on Thursday. That's a record high reading for margin debt, well above January's record of $799 billion.It's common for margin debt to rise and fall with the stock market, as increased portfolio values afford investors more leverage to take on from their brokers. But the record rise in margin debt is also one of the fastest on record.
Leverage is a double-edged sword for investors, as many take on the debt to buy more
But until a broad market decline materializes, expect margin debt to continue its surge to record highs as it's led by new highs in the stock market.
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